If Okun's Law holds true, then a 9% increase in GDP would lead to a ________ percentage point decrease in the unemployment rate.
A. 1
B. 2
C. 3
D. 6
Answer: C
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Economists argue that individuals should continue to consume until total benefit equals total cost
Indicate whether the statement is true or false
Nations that borrow from abroad to support current consumption
A) will always be better off in the future. B) may sacrifice future consumption. C) will always sacrifice future consumption. D) will always sacrifice current consumption.
Which of the following is included in GDP, but may not have been economically beneficial?
a. Building schools b. Water treatment plant construction c. Residential alarm installations d. Airport construction
Critics of the Keynesian view of closing a recessionary gap argue that
a. Keynesians fail to appreciate the self-correcting nature of the economy b. government spending is virtually cost-free because resources are unemployed c. deficit financing places no burden on the economy d. public works programs never continue beyond their usefulness e. deficits are always needed to stimulate the economy