The chief economic cost associated with unemployment is
a. the benefits paid to the unemployed by the government
b. the foregone output that would have been produced if those individuals were employed
c. the taxes that are passed along to individuals to pay for unemployment insurance
d. higher crime rates
e. the psychological costs associated with unemployment
B
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The first three elements of a financial crisis are correctly represented as taking place in the following order:
a. large decline in some asset prices ? insolvencies at financial institutions ? decline in confidence in financial institutions b. insolvencies at financial institutions ? decline in confidence in financial institutions ? large decline in some asset prices c. insolvencies at financial institutions ? economic downturn ? credit crunch d. insolvencies at financial institutions ? credit crunch ? economic downturn
In 1979, when the Fed was deciding how aggressively to fight inflation, the typical estimate of the sacrifice ratio was
a. 1. b. 5. c. 7. d. 10.