Terrell, an auto repair mechanic who remains unemployed because he refuses to work for less than $1,000 an hour, is
a. counted as part of the labor force.
b. considered frictionally unemployed.
c. an underemployed worker.
d. not counted as part of the labor force.
e. considered as productively active.
Answer: d. not counted as part of the labor force.
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Excluding household and underground production leads to
A) underestimation of real GDP but not nominal GDP. B) overestimation of real GDP but not nominal GDP. C) overestimation of both real GDP and nominal GDP. D) underestimation of both real GDP and nominal GDP. E) underestimation of real GDP an overestimation of nominal GDP.
In Figure 15-2 above, the difference between consumption levels at point A and point B is equal to
A) the long run MPC times the change in disposable income. B) the short run MPC times the change in disposable income. C) (Y0 - Y2 ) times the short run change in income. D) the long run change in income times (Y0 - YP).
Assuming the required reserve ratio is 20 percent and total reserves are set at $20 billion, then the maximum amount of deposits would be
a. $100 billion. b. $40 billion. b. $4 billion. d. $60 billion. e. $120 billion.
Suppose you are a member of the Council of Economic Advisors and you are trying to get the US economy out of a recession and increase RGDP. What Keynesian macroeconomic policy could be advised to the government?
a. reduce the tax rate and increase government spending (expansionary fiscal policy) b. raise the tax rate and reduce government spending c. reduce government spending d. raise the tax rate