John Steinbeck's Cannery Row describes a character who takes his own life because of poor job prospects. If he was an unemployed person who gave up looking for work, he would be considered:
a. chronically unemployed.
b. a discouraged worker.
c. a member of the labor force.
d. frictionally unemployed.
QUESTION 2If the spending multiplier is 3 and the desired amount of increase in real GDP is 90 million, then by how much would government spending have to increase?
a. 270 million.
b. 90 million.
c. 30 million.
d. 0.
QUESTION 3According to Keynesian economists, which of the following is not a consequence of increasing the money supply?
a. A lower interest rate.
b. Greater investment.
c. Lower real GDP.
d. Higher real GDP.
QUESTION 4Brian Vargo, 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.
QUESTION 5Which of the following statements is true?
a. Fiscal policy is the manipulation of the nation's money supply to influence the nation's output, employment and price level.
b. Discretionary fiscal policy is the deliberate use of changes in government spending and taxes to stabilize the economy.
c. The tax multiplier is the change in aggregate demand resulting from an initial change in government spending.
d. A budget deficit exists when government tax revenues exceed government spending.
QUESTION 6If the economy is inflationary, the Fed would most likely:
a. encourage banks to provide loans by buying government securities.
b. encourage banks to provide loans by raising the discount rate.
c. encourage banks to provide loans by selling government securities.
d. restrict bank lending by selling government securities.
e. restrict bank lending by lowering the federal funds rate.
QUESTION 7The number of people officially unemployed is not the same as the number of people who can't find a job because:
a. people who have jobs continue to look for better ones.
b. the armed forces is included.
c. discouraged workers are not counted.
d. none of these.
QUESTION 8Fiscal policy is concerned with:
a. encouraging businesses to invest.
b. regulation of net exports.
c. changes in government spending and/or tax revenues.
d. expanding and contracting the money supply.
Quick Reply
