In a non-recession year, the majority of U.S. unemployment is
What will be an ideal response?
Frictional
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Use the following graph to answer the next question.
Suppose an economy's full employment output is at the level Q1, and the economy's current aggregate demand is represented by AD2. If the government swiftly implements contractionary fiscal policy that immediately shifts the economy's aggregate demand to AD1, the short-to-medium term aggregate demand would be most closely represented by
A. AD0. B. AD1. C. AD2. D. AD3.
What two fiscal policy measures do you recommend to remove it?
Other things being equal, an increase in the number of sellers of a good will __________________ for that good.
A. increase equilibrium price and quantity B. increase equilibrium price and decrease equilibrium quantity C. decrease equilibrium price and increase equilibrium quantity D. decrease equilibrium price and quantity E. increase demand
To maximize profits, a firm should expand production as long as it is making profits.
Answer the following statement true (T) or false (F)