What is the most appropriate test to evaluate whether a government-spending program will improve living standards and lead to higher income levels?
A) The value of the output generated by the government-spending program compared to its opportunity cost
B) The total number of jobs created by the program
C) The reduction in the rate of unemployment as the result of the spending on the program
D) The taxes necessary to finance the program compared to the revenues generated by the additional employment created by the program
A) The value of the output generated by the government-spending program compared to its opportunity cost
You might also like to view...
Explain how the real wage and the extra output produced by each worker determine the quantity of labor demanded by a firm
What will be an ideal response?
Marginal cost is best defined as
A) the extra cost of producing one more unit of output. B) the profit earned from selling one more unit of output. C) the price received from selling one more unit of output. D) equal to producer surplus.
Lessons that economists and policy makers have learned from the recent global financial crisis include
A) Developments in the financial sector have a far greater impact on economic activity than was earlier realized. B) The zero lower bound on interest rates can be a serious problem. C) The cost of cleaning up after a financial crisis is very high. D) Price and output stability do not ensure financial stability. E) All of the above.
A policy that raised the natural rate of unemployment would shift
a. both the short-run and the long-run Phillips curves to the right. b. the short-run Phillips curve right but leave the long-run Phillips curve unchanged. c. the long-run Phillips curve right but leave the short-run Phillips curve unchanged. d. neither the long-run Phillips curve nor the short-run Phillips curve right.