Suppose there are two economies that are identical in every way with the following exception. Economy A has an unemployment compensation system while economy B does NOT have an unemployment compensation system

Now suppose both economies experience the same drop in planned investment. Which of the following is correct? A) Real GDP will fall more in economy A than in economy B.
B) Real GDP will fall more in economy B than in economy A.
C) Real GDP will fall the same in both economies.
D) The effect on the relative size of the reduction in real GDP in the two economies is ambiguous.


B

Economics

You might also like to view...

On-the-job experience causes labor productivity to increase through an improvement in human capital

a. True b. False Indicate whether the statement is true or false

Economics

If the government enacts contractionary fiscal policy, it is most likely at which of the following equilibria in the graph shown?



A. A
B. B
C. C
D. D

Economics

Fractional reserve banking originated

A) when the United States Congress passed a law regarding the required reserve ratio. B) when goldsmiths realized they could issue warehouse receipts beyond gold on deposits. C) with the establishment of the Federal Reserve System. D) in the United States with the Clayton Act.

Economics

When electronic digital wristwatches were first introduced in 1972 they were priced at $2,100. If the CPI in 1972 was 42 and the CPI in 2019 is 275, then this price is equivalent to approximately ______________________in 2019 dollars.

A. $20,950 B. $11,650 C. $13,750 D. $245 $321

Economics