When unemployed people stop looking for jobs, the
A. Unemployment rate decreases and the labor force increases.
B. Unemployment rate decreases and the labor force decreases.
C. Unemployment rate increases and the labor force decreases.
D. Unemployment rate increases and the labor force increases.
Answer: B
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The rational expectations hypothesis is a theory that states that
A) people make their economic plans by using all available past and present information and their understanding about how the economy operates. B) individuals can predict the future perfectly, at least with respect to macroeconomic variables like the interest rate and inflation. C) people make their economic plans in an irrational, intuitive manner. D) people make their economic plans by relying on the policy statements made by the President and by leaders in Congress.
The difference between actual reserves and required reserves is
A) net worth. B) excess reserves. C) illegal reserves. D) desired reserves.