What happened to government expenditure levels in 2009?
a. They reached record lows for wartime.
b. They reached record highs for peacetime.
c. They created a recession.
d. They ended a recession.
b. They reached record highs for peacetime.
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Large income differences will be eradicated if the market mechanism is working well.
Answer the following statement true (T) or false (F)
If firms have to change their production techniques in order to change the quantities they supply, their response to a price change will be less in a period of a year as compared to what they can do in a month
a. True b. False Indicate whether the statement is true or false
When an economy dips into recession, automatic stabilizers will tend to
a. enlarge the budget deficit (or reduce the surplus). b. reduce the budget deficit (or increase the surplus). c. ensure that the budget remains in balance. d. expand the supply of money and, thereby, stimulate aggregate demand.
Which of the following scenarios best illustrates the concept of cyclical unemployment?
A. Grace loses her job because of new automated machinery. B. Sean quits his job to look for work that is more fun. C. Ellen quits looking for work because she doesn’t think she can find a suitable job. D. Marian loses her job because of a recession.