One proposal is to index social security payments
a. to the CPI minus half a percentage point to correct for the CPI's overstatement of inflation.
b. to the CPI plus half a percentage point to correct for the CPI's overstatement of inflation.
c. to the CPI minus half a percentage point to correct for the CPI's understatement of inflation.
d. to the average tax rate that social security recipients face.
e. to the average increase in the CPI over the last five years.
A
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When an individual is frictionally unemployed, the unemployment arises in part from
A) a short-term elimination of jobs because of a slowdown in business activity. B) individuals searching for appropriate employment. C) the permanent elimination of jobs because of a change in the structure of the economy. D) a reduction in the overall demand for workers' skills.
Which of the following was NOT cited as contributing to unusual uncertainty having an adverse effect on aggregate supply?
A) the possibility that Congress may let the 2001, 2003 tax cuts to expire B) the Fed's limited use of monetary policy in fighting the recession C) the severity of the financial crisis D) concern that the Affordable Care Act would increase the cost of hiring workers