Many economists argue that, in the long run, the economy self-corrects and achieves full employment. This argument is known as the:
a. natural rate hypothesis.
b. incomes policy approach.
c. political business cycle theory.
d. Keynesian cross model.
a
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List and define the three functions of money
What will be an ideal response?
Suppose that in a barter economy Tom bakes bread and Hans produces chocolates. Tom wants chocolates but Hans doesn't like bread, so Hans is unwilling to trade with Tom. Tom's problem is an example of which problem associated with a barter system?
A. The double coincidence of wants problem B. The law of diminishing returns C. Too much specialization D. Not enough prices
Taxation and government spending are examples of fiscal policy tools used to stabilize an economy.
Answer the following statement true (T) or false (F)
Which of the following can make the unemployment rate fall?
A. A decrease in the number of people who are looking for work. B. A decrease in the number of people who are looking for work and an increase in the number of people with jobs. C. An increase in the number of people who are looking for work. D. An increase in the number of people with jobs.