The Keynesian approach, with its focus on aggregate demand and sticky prices, has proven useful in understanding how the economy fluctuates in the short run and why recessions and
a. natural unemployment occur.
b. cyclical unemployment occur.
c. structural unemployment occur.
d. full unemployment occur.
b. cyclical unemployment occur.
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Suppose employees pay a bond of $1,000 to an employer. The gain from shirking is $400. Monitoring devices have been installed so that there is a 50% chance of being caught if you are shirking
The company is considering the installation of additional monitoring devices to increase the chance of catching a shirker to 100%. They feel this is needed to deter all shirking. What is your recommendation to the company? Explain.
What best describes US federal fiscal experience in the late 1920s and early 1930s?
a. Revenues collected increased rapidly through the period. b. A balanced budget was maintained for most of the Depression. c. Tax rates were consistently lowered to spur economic growth. d. Expenditures grew by over 300% from 1927 to 1940.