Suppose the US is in a recession while foreign countries that trade with the US are not. How will this affect the US?
A. US imports will fall, US exports will rise, and AD will fall
B. US imports will fall, US exports will rise, and AD will rise
C. US imports will rise, US exports will fall, and AD will fall
D. US imports will fall, US exports will fall, and AD will remain unchanged
Ans: B. US imports will fall, US exports will rise, and AD will rise
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Which of the following is a positive effect of job search and the unemployment that often accompanies it?
a. It keeps wages and income levels low. b. It permits individuals to better match their skills and preferences with the requirements of a job. c. It reduces the wage gap between high skill workers and those with few skills. d. It creates political pressure for an increase in the minimum wage, which will reduce the rate of unemployment in the long run.