Keynesian economists argue that during a recession
a. private sector spending will rise and therefore government spending should be reduced in order to help maintain aggregate demand at or near the full employment level.
b. private sector spending will decline, and therefore government spending should increase in order to help maintain a high level of aggregate demand.
c. private sector spending will decline, and therefore government spending should be reduced in order to avoid the crowding out of still more private sector spending.
d. private sector spending will rise and therefore government spending should be increased in order to provide more stimulus for the economy.
B
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If a resource is underemployed, it
a. is being used in production, but not in its most productive use b. is essentially unemployed c. is not considered a productive resource d. cannot be used as a factor of production e. must be a labor resource
Advocates of the minimum wage admit that it has some adverse effects, but they believe that these effects are small and that a higher minimum wage makes the poor better off
a. True b. False Indicate whether the statement is true or false