Which of the following would increase the unemployment rate?
A) a law making it illegal to work more than 35 hours per week
B) a cut in unemployment compensation
C) an increase in unemployment insurance payments
D) a decrease in the minimum wage
Answer: C
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When analyzing how money affects income, we are analyzing the way in which a
A. stock affects another stock. B. stock affects a flow. C. flow affects another flow. D. flow affects a stock.
The simple deposit multiplier is the ratio of the amount of
A) new reserves created by the banks to the amount of loans. B) loans issued by the banks to deposits created by the banks. C) new reserves created by the banks to the amount of deposits. D) deposits created by the banks to the amount of new reserves.
In a closed economy ________
A) investment equals consumption B) investment equals savings C) saving equals consumption D) exports are greater than imports
Because people consider government bonds to be part of their wealth, they
a. tend to overconsume and undersave b. tend to oversave and underconsume c. realize that taxes balance out the interest they earn from these bonds, and therefore do not change their levels of consumption and saving d. tend to try to buy more bonds because they are safe, interest-bearing assets, and therefore save more and consume less e. tend to assume that the taxes are also assessed on their interest income, and therefore oversave and underconsume