The level of aggregate output and income where there is a balance between spending and production decisions and where the economy moves toward is called:
A) disequilibrium level of output and income.
B) equilibrium level of output and income.
C) disequilibrium level of employment.
D) none of the above.
B
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A recession causes a decrease in the demand for housing, resulting in substantial layoffs in the construction industry. The people laid off are considered
A) cyclically unemployment. B) frictionally unemployment. C) seasonally unemployment. D) structurally unemployment.
Which trade strategy have developing countries used to restrict imports of manufactured goods so that the domestic market is preserved for home producers?
A) international commodity agreement B) export promotion C) multilateral contract D) import substitution E) export subsidies
If exports rise and imports fall, then:
A. GDP will increase. B. GDP will decrease. C. GDP may remain unchanged. D. net exports will fall.
If taxes depend on income and the MPC is 0.6 and t is 0.3, the tax multiplier is
A. -1.03. B. -1.72. C. -2.0. D. -2.24.