Prime Minister Emma Bigshot urges passage of a bill to reduce unemployment benefits from very generous levels in her country. She also urges her country's central bank to raise the rate at which the money supply is increasing. In the long run which, if either, of these policies will reduce the unemployment rate?
a. both reducing the generosity of unemployment benefits and raising the rate at which the money supply is increasing
b. reducing the generosity of unemployment benefits but not raising the rate at which the money supply is increasing
c. raising the rate at which the money supply is increasing, but not reducing the generosity of unemployment benefits
d. neither reducing the generosity of unemployment benefits nor raising the rate at which the money supply is increasing
b
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Refer to Figure 19-5. The Chinese government pegs the yuan to the dollar, at one of the specified exchange rates on the graph, such that it overvalues its currency. Using the figure above, this would generate
A) a shortage of yuan equal to 500 million. B) a shortage of yuan equal to 100 million. C) a surplus of yuan equal to 700 million. D) a surplus of yuan equal to 200 million.
There is currently a resurgence in Keynesian macroeconomics, based on the assumptions of market ________ and ________ expectations
A) non-clearing, adaptive B) non-clearing, rational C) clearing, adaptive D) clearing, rational
Wealth and income are the same
Indicate whether the statement is true or false
Lower interest rates:
a) decrease consumption and investment spending. b) increase consumption and decrease investment spending. c) decrease consumption and increase investment spending. d) increase consumption and investment spending.