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During an economic boom, the employment-to-population ratio rises because:

Select one:

a.

inflation tends to rise at that time.

b.

the opportunity cost of leisure increases.

c.

fewer people are available to work.

d.

real wages tend to fall at that time.

Jamie has a fixed amount of savings and is planning to invest in one of two different projects with the same expected return on investment. Other things being equal, Jamie will most likely invest in:

Select one:

a.

the project that is more easily reversed.

b.

the project that is less easily reversed.

c.

either of the two projects regardless of how reversible they are.

d.

neither of the two projects because there is always uncertainty in their returns.

As a result of time bunching, the effect of an economic shock on the economy:

Select one:

a.

is smaller.

b.

is larger.

c.

becomes less certain.

d.

becomes more certain.

Because of intertemporal substitution, a negative shock to aggregate demand could result in:

Select one:

a.

a shift of the LRAS curve to the right.

b.

a shift of the LRAS curve to the left.

c.

an upward movement along the LRAS curve.

d.

a downward movement along the LRAS curve.

If drought reduces farm output, farmers will probably:

Select one:

a.

work harder to try to make up for the lost output.

b.

work less hard and devote less capital to their fields.

c.

work the same amount as they normally do.

d.

celebrate.

The idea that a person or business is most likely to work hard when doing so brings the greatest return is called:

Select one:

a.

intertemporal substitution.

b.

irreversible investment.

c.

labor adjustment cost.

d.

time bunching.