Technological advancements cause structural unemployment. However, they help in:
a. lowering the rate of interest in the economy.
b. increasing the price level in the economy and hence make business more profitable for the firms.
c. improving living standards by giving consumers a greater variety of goods at lower costs.
d. raising government's tax revenue.
e. raising the aggregate income in the economy.
c
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An information cascade occurs when:
A) the buyer of a good has more information than the seller and takes hidden actions. B) the seller of a good has more information about the hidden characteristics of the good. C) people make the same decisions as others without focusing on private information. D) people have contradictory information about a good they want to consume.
Crowding out would most likely occur when:
A. the federal government engages in bond sales to finance its budget deficit. B. tax receipts rise more slowly than anticipated, resulting in the need to cut government spending. C. workers lose jobs as a result of anti-inflationary fiscal policies. D. Congress enacts budget cuts to balance the budget.