According to Keynes, if the economy is in a deep recession, an increase in aggregate demand will increase _____ without putting significant upward pressure on _____.
Fill in the blank(s) with the appropriate word(s).
real GDP; the price level
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In an economy, 40 million people are employed, 2 million are unemployed, and 8 million are not in the labor force. What is the labor force participation rate?
A) 83 percent B) 84 percent C) 80 percent D) 87.5 percent
As the MPC gets close to 1, the value of the multiplier approaches
a. 0. b. 1. c. infinity. d. None of the above is correct.
One factor limiting the Federal Reserve's ability to use monetary policy to stimulate the economy is that the Federal Reserve has
A. tools to lower interest rates, but they do not work at interest rates below 0%. B. tools to lower interest rates, but they do not work at interest rates below 10%. C. no tools at its disposal to lower interest rates. D. tools to lower interest rates, but they do not work at interest rates above 10%.
Teenage unemployment is substantially higher than unemployment among prime-age workers because teenagers
a. are more likely to switch jobs and move into and out of the labor force. b. are less likely to be in the labor force than are older workers since many teenagers are still in school. c. are more likely to be in the armed forces, therefore, they're counted as unemployed. d. generally think they can find jobs that are available only to experienced, highly skilled workers if they just search diligently enough.