Purdue Econ 252 Final Practice |37 Questions| With Correct Answers.

According to​ Keynes's view on animal​ spirits, ____________. A. the economy will fluctuate in line with the underlying economic fundamentals. B. downward wage rigidity could lead to pessimism in the​ economy, resulting in the​ self-fulfilling prophecy of a decline in economic output. C. the economy could fluctuate beyond the level that could be explained by the underlying economic fundamentals. Your answer is correct.D. technological breakthroughs could cause rapid increases in output. {Ans: C.}If the unemployment rate is 7.0​% and real GDP grows by 5.2​%, the new unemployment rate is_________. ​(Round your response to one decimal place.​) {Ans: 5.9}Using your​ graph, the most likely explanation for the shift of the labor demand curve is​ ____________. A. the increase in productivity decreases the marginal product of labor relative to the marginal product of​ capital, leading to the need to hire more workers to fully utilize the capital. B. businesses are optimistic about the future and so hire more workers. C. the increase in productivity increases the marginal product of​ labor, leading to an increase in labor demand. Your answer is correct. D. businesses need more workers with technological​ skills, and so push the overall labor demand curve to the right.