Cyclical unemployment is positive when
A) the inflation rate is positive.
B) the economy is at the peak of a business expansion.
C) the natural rate of unemployment exceeds the actual rate.
D) the actual unemployment rate exceeds the natural rate.
Answer: D) the actual unemployment rate exceeds the natural rate.
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In a closed economy, aggregate demand is the sum of
A) consumer expenditure, actual investment spending, and government spending. B) consumer expenditure, planned investment spending, and government spending. C) consumer expenditure, actual investment spending, government spending, and net exports. D) consumer expenditure, planned investment spending, government spending, and net exports.
When the U.S. decides to strengthen its border control, the labor market in California is affected. We would expect the:
A. demand for labor to decrease. B. supply of labor to increase. C. supply of labor to decrease. D. demand of labor to increase.
One of the strengths of monetary policy relative to fiscal policy is that monetary policy:
A. can be implemented more quickly. B. is subject to closer political scrutiny. C. does not produce a net export effect. D. entails a larger spending income multiplier effect on real GDP.
Which of the following would be considered part of the underground economy?
a. tips reported to the IRS by a waitress b. a barber giving a person a haircut in exchange for a meal c. income earned through selling shares of stock d. the portion of a professional athlete's salary that is economic rent e. donations received by a local church in their collection plate on Sunday morning