If the economy automatically tends toward full employment, then government stabilization policy
A. must be constantly in force.
B. will be necessary only in recessions.
C. will be necessary only in inflationary periods.
D. will not be necessary.
Answer: D
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Unanticipated inflation is associated with cost increases which are not expected
Indicate whether the statement is true or false
Figure 5-17
Which of the following statements about Figure 5-17 must be correct?
a.
The consumer pays a higher dollar price per unit for good Y at A than at D.
b.
The consumer pays the same dollar price per unit for good Y at A and at B.
c.
The consumer pays a higher dollar price per unit for good X at D than at A.
d.
The consumer pays a higher dollar price per unit for good X at A than at C.
The basic data source to track the number of unemployed comes from a calculation of applications for new unemployment benefits.
Answer the following statement true (T) or false (F)
An increase in government spending with no change in taxes leads to a
A) lower income level B) lower price level C) smaller money supply D) higher interest rate E) higher bond price