Uncertainty about the future is likely to
A. decrease current spending.
B. increase current spending.
C. have no impact on current spending.
D. either increase or decrease current spending.
Answer: A
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The food processing industry in Richland accounts for 20% of its GDP
Which of the following will happen if firms in this industry become pessimistic about the future demand for their products? Assume that consumption and government expenditure remains unchanged. A) Richland's unemployment rate will fall. B) Richland's interest rate will increase. C) Richland's inflation rate will increase. D) Richland's GDP will fall.
The most appropriate countercyclical policy, or stabilization policy, in times of unemployment, according to classical economists, is for the government to:
a. increase the minimum wage. b. impose wage and price controls. c. stimulate aggregate demand. d. cut taxes. e. do nothing.