Which of the following leads to a fundamental difficulty for stabilization policy?
A. Time lags in policy decisions
B. Presence of shock absorbers in the economy
C. Absence of data on the effectiveness of policy measures
D. Existence of self-correcting mechanism
Answer: A
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Mick Jagger, a former student at the London School of Economics, once sang, “You can’t always get what you want, but if you try sometime, you just might find you can get what you need.” Another statement of the basic economic principle expressed in this lyric is that
A. rational decisions are not always possible. B. you can allocate your resources to what gives you the highest value. C. you can create the supply to meet your own demand. D. you can maximize social welfare by making optimal decisions.
If the economy is at full employment, then the unemployment rate
A) is greater than the natural unemployment rate. B) is equal to the natural unemployment rate. C) is below the natural unemployment rate. D) is equal to zero. E) can be anywhere on a short-run Phillips curve.
A small country is an international borrower and its domestic supply of loanable funds increases. Consequently, the equilibrium quantity of loanable funds used in the country ________ and the country's international borrowing ________
A) does not change; decreases B) does not change; does not change C) does not change; increases D) increases; does not change
In the table below are statistics showing the civilian non-institutional population, the civilian labor force and total employment in year 1 and year 2. Make the computations necessary to complete the table. (Number of persons is in thousands.)
