In 2008 as the recession worsened, suppose discouraged workers were included as part of the unemployment rate. Which of the following would have occurred?
A) The unemployment rate would have increased.
B) The unemployment rate would have decreased.
C) The labor force participation rate would not have changed.
D) The unemployment rate would not have changed.
E) The labor force participation rate would have decreased.
A
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Under current U.S. tax laws, the interest paid on any debt-financed investment ________ tax deductible and the interest expense ________ the net present value of an investment.
A) is not; raises B) is; lowers C) is; raises D) is not; lowers
When the Fed makes bonds more or less attractive, it influences the:
A. Open market decision. B. Money multiplier. C. Portfolio decision. D. Reserve decision.
To answer the next question, use the information in the table below which illustrates the multiplier process resulting from an autonomous increase in investment by $5. Change in IncomeChange in ConsumptionChange in SavingsAssumed increase in investment$5.00 $1.25Second round $2.81 All other rounds 8.44 Totals 5.00The marginal propensity to consume is
A. 0.75. B. 0.9. C. 0.5. D. 0.8.
If the exchange rate measured in euros per dollar increases, then
A) the dollar depreciates relative to the euro. B) the euro appreciates relative to the dollar. C) the euro depreciates relative to the dollar. D) neither currency appreciates or depreciates.