Which of the following is true with regard to the use of countercyclical fiscal policy as a stabilization tool?
What will be an ideal response?
Successful fiscal policy is difficult to achieve because Congress acts slowly and out ability to predict the future is limited.
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The price of good X is $2.00 and the price of good Y is $1.00. Last year, the price of good X was $1.00 and the price of good Y was $2.00. If a consumer has $100, draw there their budget line for each year (label them accordingly). Add as many indifference curves as needed to show a situation in which the consumer is no better or worse off this year than they were last year. Be sure to label their optimal baskets for both years. Explain why what you have drawn is correct.
What will be an ideal response?
In August 2006, the Canadian unemployment rate was 6.4 percent. In August 2008, the Canadian unemployment rate was 6.1 percent. Between August 2006 and August 2008, the number of job losers ________, the number of job leavers ________, and the number of entrants and reentrants ________.
A) decreased; did not change much; decreased B) decreased; increased; increased C) decreased; decreased; increased D) decreased; increased; decreased E) did not change much; increased; increased