When the economy is creating less output than its potential, it means:
A. contractionary policy needs to be enacted.
B. there are some resources that are unemployed.
C. governments are likely to reduce their spending.
D. the economy is in an economic boom.
Answer: B
You might also like to view...
Everything else held constant, when output is ________ the natural rate level, wages will begin to ________, increasing short-run aggregate supply
A) above; fall B) above; rise C) below; fall D) below; rise
If a hurricane were to wipe out the majority of the eastern seaboard in the United States, it would likely cause a:
A. short-run supply shock. B. long-run supply shock. C. long-run demand shock. D. short-run demand shock.
It is best to view the official unemployment rate as a useful but imperfect measure of joblessness
a. True b. False Indicate whether the statement is true or false
Which of the following will not occur as the result of a decrease in net taxes?
A) decreased household saving B) decreased government saving C) a shift to the left of the supply curve for loanable funds D) all of the above