The effect of _____ is to produce an unemployment rate that understates actual unemployment
a. the underground economy
b. discouraged workers and underemployment
c. the growth in real GDP
d. institutionalized and retired labor force
e. seasonally unemployed workers
b
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
In the long run,
a. all of the firm's input quantities are variable. b. the firm can vary the quantities of some but not all inputs. c. managers become less efficient. d. the total cost of producing any given level of output is greater than or equal to the short-run total cost of producing that level of output.
The political process might negatively affect government attempts to stabilize an economy by ______.
a. collecting policy information b. catering to special interests c. having a long-term view d. assisting local businesses
An increase in the public debt will:
A. decrease the U.S. debt held by citizens and institutions in foreign nations. B. decrease the potential for higher taxation in the United States. C. increase the inequality in the distribution of income. D. increase incentives to work and bear risk.