A problem with the use of aggregate demand management to stabilize the business cycle is that
A. fiscal policy takes a long time to have any impact on the economy.
B. monetary policy isn't available to use when interest rates are already rising because of higher inflation.
C. the precise amount that output will change in response to monetary or fiscal policy isn't known.
D. monetary policy is difficult to use, because the decision-making process is long and complicated.
Answer: C
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Labor productivity is $20 per hour and aggregate hours are 400 billion hours
a. What does real GDP equal? b. Because of technological advances, labor productivity doubles to $40 per hour. Furthermore, assume that aggregate hours decrease to 300 billion hours. What does real GDP equal?
Harold finds that the higher the wage rate his employer offers, the more hours he is willing to work. Harold's supply curve of labor is
a. upward sloping b. downward sloping c. backward bending d. U-shaped e. undetermined with this information
Economic analysis indicates that environmental quality
a. is something that people value, and therefore are willing to pay for. b. should always be regulated by the government. c. is something people should be forced to pay for no matter what their income levels. d. is not important to most people.
In the town of Gotham the adult population is 560 thousand, the number unemployed is 25 thousand, and 185 thousand are not in the labor force. Calculate the unemployment rate