Full employment is the situation in which the economy operates at an unemployment rate equal to the sum of:
A. structural and frictional unemployment.
B. cyclical and frictional unemployment.
C. structural and cyclical unemployment.
D. structural, frictional, and cyclical unemployment.
Answer: A
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If the balance on the current account is zero, which of the following transactions will cause it to go into deficit?
a. The Moscow Capital Investment Corporation makes a loan to a US firm b. A US subsidiary exports raw materials to its French parent company c. US firms and individuals receive dividends on US investments in Latin America d. US tourists in Great Britain purchase pounds sterling e. Foreigners purchase US securities
Refer to Figure 27-8. In the graph above, suppose the economy in Year 1 is at point A and is expected in Year 2 to be at point B. Which of the following policies could Congress and the president use to move the economy to point C?
A) increase income taxes B) decrease government purchases C) increase government purchases D) sell Treasury bills