In a closed economy, there should be a close positive relationship between
a. budget deficits and interest rates.
b. trade deficits and budget deficits.
c. savings and investment.
d. investment and consumption.
e. Both a and c.
E
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The city of Hope has a labor force of 1000. Twenty people lose their jobs each month and remain unemployed for exactly one month before finding jobs
On January 1, May 1, and September 1 of each year, 50 people lose their jobs for a period of four months before finding new jobs. What is the unemployment rate in any given month? A) 2% B) 3% C) 5% D) 7%
Monetarists argue that fiscal policy is ineffective because:
a. the velocity of money is predictable. b. the crowding-out effect reduces investment. c. prices and wages are sticky in the short run. d. it causes the value of the dollar to depreciate.