(Last Word) In response to the Great Recession, the federal government engaged in significant deficit-funded spending. While it kept the recession from getting worse, and did result in some positive economic growth, it did not fully achieve the desired
result. Which of the following best explains why the fiscal policy actions fell short of their objective?
A. Despite the fiscal stimulus, aggregate demand continued to shift to the right.
B. The fiscal stimulus caused a significant leftward shift of aggregate supply.
C. Offsetting monetary policy caused the aggregate demand to remain virtually unchanged,
meaning that all gains in output came from aggregate supply shifts.
D. The fiscal stimulus shifted aggregate demand to the right, but not enough to restore full
employment.
D. The fiscal stimulus shifted aggregate demand to the right, but not enough to restore full
employment.
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Even though women may often constitute the majority of the rural-urban migrants in a country, they usually still remain employed in the informal sector. Why? What are the consequences of this?
What will be an ideal response?
An economic theory claims that a rise in gasoline prices will cause gasoline purchases to fall, Ceteris paribus. The phrase "Ceteris paribus" means that:
a. other relevant factors like consumer incomes must be held constant. b. the gasoline prices must first be adjusted for inflation. c. the theory is widely accepted but cannot be accurately tested. d. consumers' need for gasoline remains the same regardless of the price.
Suppose that there is not enough parking at an urban university. Sometimes students come to campus, spend a few minutes searching for a parking spot, and then decide that going to class isn't worth the effort of continuing to search for a parking spot, so they go home. Assume that all professors give midterm exams on the same day. You would expect the optimal amount of time spent searching for a parking spot on that day to ________ because ________.
A. decrease; the marginal benefit of search is lower B. increase; the marginal cost of search is lower C. decrease; the marginal cost of search is higher D. increase; the marginal benefit of search is higher
In February of 2015, there were 157 million people in the labor force, 8.6 million of whom were unemployed. The unemployment rate in February 2015 was:
A. 5.8%. B. 6.4%. C. 8.6%. D. 5.5%.