Suppose the population of Tiny Town is 100 people and the working age population is 70. If 10 of these people are unemployed, the unemployment rate in Tiny Town is
A) 10 percent.
B) 10/70 × 100.
C) 10/80 × 100.
D) There is not enough information provided to calculate the unemployment rate.
D
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Automatic stabilizers
A) increase the problems that lags cause in using fiscal policy as a stabilization tool. B) are changes in taxes or government spending that increase aggregate demand without requiring policymakers to act when the economy goes into recession. C) are changes in taxes or government spending that policymakers agree to when the economy goes into recession. D) are part of discretionary fiscal policy.
The Fed can determine how the money demand curve has shifted by
a. studying interest rate changes b. looking at the number of new loans c. studying unemployment compensation claims d. experimenting with changes in credit conditions e. checking the size of the federal budget deficit