The most appropriate countercyclical policy, or stabilization policy, in times of unemployment, according to classical economists, is for the government to:
a. increase the minimum wage.
b. impose wage and price controls.
c. stimulate aggregate demand.
d. cut taxes.
e. do nothing.
e
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Assume that Alex would like to purchase a combination of product A and product B such that, after he is done spending his limited income, the MUa / Pa = 8 and MUb / Pb = 4. To maximize utility without spending more money, Alex should
A. purchase more of both product A and product B. B. purchase less of product A and more of product B. C. purchase more of product A and less of product B. D. make no change in purchases of products A and B.
Which groups tend to have greater difficulties finding employment as a result of the minimum wage?
A) Minorities B) Teens C) Those with little work experience D) All of the above.
Consider a monopolistically competitive industry which is in long-run equilibrium. Which of the following is TRUE?
A) All firms charge a price equal to average total cost. B) All firms charge a price equal to marginal cost. C) All firms earn positive economic profit. D) Demand, average total cost, and marginal cost all intersect.
At an interest rate of 5 percent, the present value of $1,000 to be received two years from today is
A) less than $875. B) between $875 and $925. C) between $925 and $975. D) more than $975.