Unemployment compensation programs tend to increase the unemployment rate because:
a. they increase the opportunity cost of leisure
b. they provide benefits only to unemployed people under the age of 18.
c. they legally fix the minimum wage that has to be paid to labor.
d. they allow unemployed persons to become more selective in what job offer they accept.
e. they do not provide benefits to labor engaged in the manufacturing sectors of the economy.
d
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Refer to Figure 7-2. At the efficient equilibrium
A) economic surplus is zero. B) economic surplus is negative. C) economic surplus is minimized. D) economic surplus is maximized.
Which of the following is not a valid criticism of discretionary fiscal policy? a. The implementation of fiscal policy is sometimes difficult
b. Time lags in fiscal policy are long. c. Fiscal policy works only during periods of stagflation. d. Fiscal policy often affects only current income, but many economic decisions are made on the basis of permanent income. e. Fiscal policy might have undesirable long-term effects on aggregate supply.
Micah buys a used car for $10,000 and spends $200 on a new radio that is made in the U.S. The end result of these two transactions is
a. U.S. consumption purchases increase by $200 and U.S. GDP increases by $200. b. U.S. consumption purchases increase by $200 and U.S. GDP increases by $10,000. c. U.S. consumption purchases increase by $10,000 and U.S. GDP increases by $10,200. d. U.S. consumption purchases increase by $10,200 and U.S. GDP increases by $10,200.
If the Fed wished to eliminate an inflationary gap, which of the following would be an appropriate policy?
What will be an ideal response?