If some gain and some lose as the result of a change, and it can be demonstrated that the value of the gains exceeds the value of the losses, then the change is said to be

Suppose current government spending increases and that individuals expect future government spending to increase. Given this information, in which of the following cases will output in the current period be more likely to decrease?

A) Individuals consider only the short run effects of changes in future macro variables when forming expectations of future output and future interest rates. B) Individuals consider only the medium run effects of changes in future macro variables when forming expectations of future output and future interest rates. C) Individuals consider only the long run effects of changes in future macro variables when forming expectations of future output and future interest rates. D) The output effects will be the same in B and C.

During the Great Depression in the 1930s unemployment was so bad that nearly _____ of the labor force was unemployed.

A. 1/2 B. 1/5 C. 1/4 D. 1/3