As the unemployment rate falls,
A) the proportion of the unemployed finding a job increases.
B) the separation rate increases.
C) the young and unskilled experience larger-than-average decreases in unemployment.
D) both A and C.
E) all of the above
D
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If the economy has an MPC of 0.8, by how much will a $50 billion increase in government purchases increase GDP? By how much will a $50 billion increase in taxes decrease GDP?
What will be an ideal response?
If a bank has positive excess reserves,
A. its actual reserves are greater than its required reserves. B. its required reserves are greater than its excess reserves. C. it is bankrupt. D. it must stop making loans.
A state decides to pass a new law raising the excise tax on cigarettes. What would be the probable incidence of this new tax?
What will be an ideal response?
Mike has just graduated from college and is now looking for a job, but has not yet found one. This causes the unemployment rate to ________ and the labor-force participation rate to ________.
A. increase; increase B. increase; stay the same C. stay the same; stay the same D. increase; decrease