Based on the data provided in the chapter, which of the following represents the largest component of the labor force?

The Lucas critique is an objection to the assumption that

A) inflation is always and everywhere a monetary phenomenon. B) there is a negative relationship between inflation and unemployment. C) historical relationships between macroeconomic variables will continue to hold after new policies are in place. D) people form expectations rationally.

Use the aggregate expenditures model and assume an economy is in equilibrium at $5 trillion which is $250 billion below full-employment GDP. If the marginal propensity to consume (MPC) is 0.60, full-employment GDP can be reached if government spending:

a. decreases by $60 billion. b. decreases by $100 billion. c. decreases by $250 billion. d. is held constant.