Unemployment & Inflation
Seasonal variations are:
variations in economic activity that occur regularly each year.
What best describes business cycles?
They are recurring but the recurrence is not regular or uniform in length
Inflation is
A rise in the level of prices
The multiplier effect means that
an increase in aggregate demand will increase income by more than the increase in aggregate demand
The four components of aggregate demand include all but which one of the following?
Consumption expenditures;Investment expenditures;Government Expenditures SavingsSavings
The marginal propensity to save is
the additions to savings from any given increase in income
The Phillips curve shows the relation between
prices or inflation and unemployment
The Keynesian paradox of thrift is an argument that
when savings increase, income falls, so the absolute quantity saved may also fall.
The average propensity to consume is
the average amount of money people spend on consumption out of any given level of income
Which one of the following forms of unemployment always exists, no matter what the condition of the economy?
Frictional unemployment
Which of the following best describes the natural rate of unemployment concept?
The unemployment rate associated with no change in the rate of inflation.
Which one of the following would tend to cause aggregate demand to rise?
A decrease in taxes
The expansion phase of the business cycle is best described by which one of the following
unemployment diminish, income, output, cons. rises
prices creep down as unused capacity develops
prices remain stable throughout expansion
unemployment begins to increase
Unemployment begins to diminish; income, output, and consumption rise; and prices may rise
The official unemployment rate increases in January after December because the Christmas season is over. Most likely ____________ unemployment has occurred.
Seasonal
Changes in consumption and savings is affected by the following factors
Changes in customs and attitudes towards savings
Changes in assets of customers.
Changes in expectations about future earnings
Fiscal policy involves
variations in government expenditures and taxes
Which one of the following is NOT an effort or proposal to impose some fiscal discipline that would restrain debt growth?
privatization; employment act 1946; line item veto; balanced budget amendment
the Employment Act of 1946
Consider an economy of 1000 people: 940 hold jobs, 40 are looking for work, and 20 are retired. The number counted as unemployed is:
40
The advantage of the two-wage system would be that
wages, and thus cost, would fall as profits fell, rather than laying off workers
Weitzman’s share economy was based on which one of the following?
A two-wage system, one part a base pay that does not vary with profits, another based on the profits of the firm