If the unemployment rate rises because the number of people not working but searching for work rises, economists would attribute this to the
A. encouraged worker effect.
B. fallacy of composition.
C. discouraged worker effect.
D. none of the options are correct.
Answer: A
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Which combination of fiscal policy actions would most likely offset each other?
A. An increase in taxes, but no change in government purchases B. A decrease in taxes and an increase in government purchases C. An increase in taxes and an increase in government purchases D. A decrease in government purchases, but no change in taxes
Scarce government resources in developing countries would be best spent on
a. circulating basic health information b. modern medical equipment c. medical schools d. health care insurance e. none of the above
Which of the following statements is true?
(a) A country runs a current account deficit if it exports more goods and services than it imports; (b) The sum of the current and capital accounts must be zero; (c) If both the current and capital accounts are in surplus, the exchange rate must appreciate; (d) None of the above are true.
A decline in disposable income:
A. increases consumption by moving upward along a specific consumption schedule. B. decreases consumption because it shifts the consumption schedule downward. C. decreases consumption by moving downward along a specific consumption schedule. D. increases consumption because it shifts the consumption schedule upward.