According to this Application, the volatility of energy prices can contribute to uncertainty in the economy. An increasingly uncertain future will tend to cause firms to
A) delay their investment decisions.
B) continue with a stable flow of investment spending so as not to get trapped by a downturning economy.
C) wait for significant GDP growth before reducing investments.
D) rely on the government to make their investment decisions for them.
Question 2
Frictional unemployment exists because:
A) firms do not make an attempt to advertise the vacancies they have.
B) unemployment benefits are capped in most economies.
C) firms and workers have imperfect information about each other and the state of the economy.
D) job markets are heavily regulated by the government..
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