Whom does the Bureau of Labor Statistics include in the discouraged workers group?
a. All those between 16 and 65 who are neither disabled nor in an institution and are also neither employed nor seeking employment.
b. Civilian labor force members who have chosen early retirement because they dislike their work or think the pay is too low.
c. Members of the noninstitutional population who say they want to be employed but aren't searching for a job.
d. Members of the civilian labor force who are looking for a job but cannot find one.
e. Anyone in the population who is not working.
QUESTION 2Keynesian analysis stresses that a tax cut that increases the government's budget deficit or reduces its budget surplus:
a. is appropriate during a period of inflation.
b. will increase the money supply.
c. will stimulate aggregate supply and, thereby, promote employment.
d. will stimulate aggregate demand and, thereby, promote employment.
QUESTION 3The Keynesian cause-and-effect sequence predicts that a decrease in the money supply will cause interest rates to:
a. fall, boosting investment and shifting the AD curve rightward, leading to an increase in real GDP.
b. fall, boosting investment and shifting the AD curve rightward, leading to a decrease in real GDP.
c. rise, cutting investment and shifting the AD curve rightward, leading to an increase in real GDP.
d. rise, boosting investment and shifting the AD curve rightward, leading to an increase in real GDP.
e. rise, cutting investment and shifting the AD curve leftward, leading to a decrease in real GDP.
QUESTION 4A discouraged worker is one who:
a. is underqualified for the current job.
b. dislikes the current job but is afraid to quit.
c. drops out of the civilian labor force because he/she cannot find a job.
d. quits his/her job because the possibility of advancement was very low.
e. is overqualified for the current job.
QUESTION 5When an economy is operating below its potential capacity, Keynesian economists argue that:
a. taxes should be raised if the government is currently running a budget deficit.
b. taxes should be lowered but only if the government is running a budget surplus.
c. the government should cut taxes and/or increase spending in order to stimulate aggregate demand.
d. all of these.
QUESTION 6The Keynesian cause-and-effect sequence predicts that an increase in the money supply will cause interest rates to:
a. fall, boosting investment and shifting the AD curve rightward, leading to an increase in real GDP.
b. fall, boosting investment and shifting the AD curve rightward, leading to a decrease in real GDP.
c. rise, cutting investment and shifting the AD curve rightward, leading to an increase in real GDP.
d. rise, boosting investment and shifting the AD curve rightward, leading to an increase in real GDP.
e. fall, cutting investment and shifting the AD curve leftward, leading to a decrease in real GDP.
QUESTION 7The presence of discouraged workers may cause:
a. the employment rate to be overstated.
b. the employment rate to be understated.
c. the unemployment rate to be overstated.
d. the unemployment rate to be understated.
e. GDP to be too large.
QUESTION 8If the marginal propensity to consume (MPC) is 0.75, and if policy makers wish to increase real GDP by 300 million, then by how much would they have to change taxes?
a. -300 million.
b. -200 million.
c. -100 million.
d. -50 million.