The smaller the underground economy the more will be the overstatement of the official unemployment rate
a. True
b. False
Indicate whether the statement is true or false
False
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An advantage of automatic stabilizers is that this type of fiscal policy is not subject to:
a. imprecise knowledge of full-employment real GDP. b. special interest groups. c. lag time problems. d. All of these are true.
Higher levels of human capital are correlated with higher earnings because firms are willing to pay more for better-educated workers who have higher marginal productivities
a. True b. False Indicate whether the statement is true or false
In a perfectly competitive market, the products sold can be described as:
(a) Homogenous; (b) Complementary; (c) Close substitutes; (d) Both (a) and (c) are correct.
Assume the government purposely incurs a budget deficit that is financed by borrowing. As a result, interest rates rise and the amount of private investment spending declines. This illustrates:
A. the equation-of-exchange effect. B. the crowding-out effect. C. the paradox of thrift. D. the wealth effect.