According to the Keynesian model, an economy will have persistent, high unemployment if:
A. the government runs a budget deficit.
B. markets operate freely.
C. its total spending is too low.
D. firms make too many investments.
Answer: C
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In an economy with a population of 100 million persons, 50 million hold civilian jobs and 20 million are not working but are looking for a job. The unemployment rate is
A) 28.6%. B) 20% C) 25% D) 13.33% E) There is not enough information to answer this question.
Mary takes out a fixed interest rate loan and then inflation rises more than expected. The real interest rate she pays is
A. higher than she'd expected, and the real value of the loan rises. B. higher than she'd expected, and the real value of the loan falls. C. lower than she'd expected, and the real value of the loan rises. D. lower then she'd expected, and the real value of the loan falls.
Suppose the following information describes the economy:Consumption8000Investment1,000Government purchases1,000Net exports0Government transfers and interest payments500Government tax collections1,700Private saving equals ________; public saving equals ________; national saving equals ________.
A. 1,000; 800; 1,000 B. 800; 200; 600 C. 1,500; 700; 2,700 D. 800; 200; 1,000
With floating exchange rates, BOP equilibrium is restored by
A) trade restrictions. B) earnings from foreign investments. C) exchange rate changes. D) All of the above.