Bill is a high-school dropout who lost his job in a fast food restaurant when the economy plunged into a recession. After 8 months, Bill is still looking for work. He is an example of
A) frictional unemployment.
B) structural unemployment.
C) cyclical unemployment.
D) the natural unemployment rate.
C
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Edgar Browning and William Johnson, in a paper published in the Journal of Political Economy (1984), presented evidence that a one-dollar transfer to the bottom 40 percent of income distribution costs the top 60 percent nine dollars. If correct, this finding proves
a. the tax system is generating significant excess burdens. b. these transfers are not worth the cost. c. loopholes have to be closed. d. the burden of the tax system is too great.
Goods and services that are used up in the production of other goods and services are called ________ goods and services.
A. value added B. final C. nominal D. intermediate
When interest rates in the U.S. decline, we can expect capital:
A. inflows and outflows to increase. B. inflows and outflows to decrease. C. outflow to decrease, and inflow to increase. D. inflow to decrease, and outflow to increase.
Which of the following characterizes the Fed's ability to prevent recessions?
A) The Fed is able to "fine tune" the economy and entirely eliminate recessions. B) The Fed is incapable of changing aggregate demand through its monetary policy tools. C) The Fed is able to keep a recession shorter and milder than it would otherwise be. D) The Fed is able to eliminate the business cycle and achieve absolute price stability.