Which of the following government policies might increase labor supply?
a. Increasing transfer payments to the needy.
b. Decreasing income tax rates.
c. Increasing income tax rates.
d. Increasing the availability of government training programs.
e. Increase payroll taxes.
B
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One of the primary reasons that Mexico has had trouble attracting foreign investment and has therefore experienced relatively low rates of economic growth is
A) poor public education and health. B) the failure to enforce the rule of law. C) low rates of saving and investment. D) persistent wars between Mexico and its neighboring countries.
Policies aimed at reducing the natural rate of unemployment are referred to as
a. stabilization policies. b. structural policies. c. macroeconomic policies. d. labor policies.
In September of 2007, the Federal Reserve Board Open Market Committee voted to lower interest rates for the first time that year. Explain how lower interest rates affect the aggregate demand curve
What will be an ideal response?
The theory of new Keynesian inflation dynamics suggests that a fall in aggregate demand would
A) immediately raise real GDP, followed by a more sluggish increase in the price level. B) immediately raise the price level, followed by a more sluggish decline in real GDP. C) immediately reduce real GDP, followed by a more sluggish decline in the price level. D) immediately reduce the price level, followed by a more sluggish decline in real GDP.