Welfare reforms enacted in 1996 put more pressure on welfare recipients to look for work. The new law mandated cutting off benefits after a certain length of time. Which of the following is likely to occur as a result of this provision?
A. the natural rate of unemployment and the unemployment rate are likely to increase.
B. the natural rate of unemployment is likely to decrease, but the unemployment rate is likely to increase.
C. the natural rate of unemployment is not affected, but the unemployment rate is likely to increase.
D. the natural rate of unemployment is not affected, but the unemployment rate is likely to fall.
Ans: A. the natural rate of unemployment and the unemployment rate are likely to increase.
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Assets Liabilities Reserves $1,000 Deposits $5,000 Loans $4,000 If the required reserve ratio is 20 percent and the bank is holding no excess reserves, the bank at this point can make no more loans.
The more willing suppliers are to substitute away from a taxed good, _____
a. the larger the proportion of the tax paid by demanders b. the smaller the proportion of the tax paid by demanders c. the greater the increase in output will be d. a and c