List three ways the measured unemployment tends to understate the unemployment problem
What will be an ideal response?
The unemployment rate does not include people who work part time.
The unemployment rate does not include people who are underemployed.
The unemployment rate does not include people who are discouraged workers.
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Sticky wages and input prices can explain why profits change along a short run aggregate supply curve
a. True b. False Indicate whether the statement is true or false
If the marginal propensity to consume is 0.75 and the desired amount of increase in real GDP is $240 billion, then by how much would government spending have to increase?
a. $240 billion b. $80 billion c. $60 billion d. $30 billion
Suppose the consumer price index (CPI) for Year X is 130. This means the average price of goods and services is:
A. currently $130. B. 130 percent more in Year X than in the base year. C. 130 percent more in the base year than in Year X. D. priced at 30 percent more in Year X than in the base year.
Under which one of the following situations would you be better off?
A. You have $10,000 in your savings account paying 5 percent per year and unanticipated inflation is 8 percent per year. B. You lend a friend $1,000 at 6 percent to be repaid in one year and unanticipated inflation is 7 percent during the year. C. You have paid $500 for a $1,000 U.S. savings bond that matures in 10 years and unanticipated inflation is 10 percent per year. D. You borrowed $2,500 at 7 percent to pay for this year's college expenses and unanticipated inflation is 12 percent during the year.