If a city, in response to a rising crime rate, persuades a number of retired police officers to come back on the police department payroll, what effect will the rising crime rate have had on gross domestic product?
What will be an ideal response?
GDP will rise.
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The hypothesis that people combine the effects of past policy changes on important economic variables with their own judgment about the future effects of current and future policy changes is the basis of the
A) short-run Phillips curve hypothesis. B) rational expectations hypothesis. C) demand-pull inflation hypothesis. D) adaptive hypothesis.
The two key objectives of the Fed are:
A) low and predictable levels of inflation, and interest rates above 10%. B) zero inflation, and zero unemployment. C) low and predictable levels of inflation, and maximum levels of employment. D) low and predictable levels of inflation, and zero unemployment.
The lack of a long-run tradeoff between the unemployment rate and the inflation rate means that
A) the natural unemployment rate cannot change. B) only a decrease in the inflation rate would bring a reduction in the natural unemployment rate. C) only fiscal policy is effective to lower the natural unemployment rate. D) only monetary policy is effective to lower the natural unemployment rate. E) an increase in the inflation rate would not bring a reduction in the natural unemployment rate.
Jason is a salesman who gets 40 percent of the revenue he generates for his company. This is an example of payment by _____
a. piece rent b. fixed salary c. executive compensation d. share contract