Unemployment
Unemplyment level changes with the business cycle
Cyclical
Government decided to cut taxes. This is _______ policy
Expansionary fiscal
Policy government uses to reduce cost of production for the producers
provision of subsidy
Supply side policies have long term
True
measurement of unemployed as per those who register to claim unemployment benefits
Claimant count
Fiscal automatic stabilizers-examples
welfare payments (transfer) and progressive taxes
The minimum price of labour that a producer must pay as per law
Minimum wages
Supply side may include fiscal policies
True
Voluntary unemployment is a type of _____ unemployment
frictional
Non-exhaustive government payments
spending on transfer payments
Payment of this reduces the income of the consumers to be spent on goods and services- a leakage
Tax
Government spending on education is _______ policy
fiscal and supply side
One adverse impact of increase in unemployment
Lower consumption, higher crime rates, mental illness, increased poverty
Proportion of extra income taken in tax
marginal taxation
A fixed amount of tax per unit of the good or service sold
Specific taxes
Reduction in taxes will lead usually to increase in unemployment
False.
One good effect
Fall in inflation, higher availability of labour
contractionary measures may fuel _____ inflation
Cost-push inflation
The amount of tax increases as the price of the good or service increases
ad valorem
Increase in bank reserves is an expansionary monetary policy
False