Suppose that as a result of a stock market boom, consumers become less concerned about saving for retirement and increase their current consumption expenditures. Which of the following would you expect to occur as a result of this change?
a. In the short run, unemployment will increase and inflation will fall.
b. In the short run, unemployment will increase and inflation will rise.
c. In the short run, unemployment will decrease and inflation will rise.
d. In the short run, unemployment will decrease and inflation will fall.
c
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The public choice model
A) applies economic analysis to government decision making. B) applies economic analysis to the collective decision making of consumers. C) examines the public's role in appointing politicians and ensuring that elected officials act in ways to reflect the public's preferences. D) examines the degree of market power that the public exerts in a market economy.
Why do price levels increase when government adopts fiscal or monetary policy to correct the economy when it faces a recession and high unemployment?
What will be an ideal response?
Government means tested programs ________ the overall poverty rate.
A. substantially decrease B. have not changed C. lead to an increase in D. drop to zero
M1 is usually larger than M2
Indicate whether the statement is true or false