Frictional unemployment will always exist since
A) some workers will always want to make a job transition.
B) the capitalist system promotes unemployment.
C) mismatches in skills will always exist.
D) the U.S. economy will continue to shrink.
A
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A reduction in the tax rate on income from saving would
a. most directly benefit the poor in the short run. b. increase real wages over time. c. decrease the capital stock over time. d. decrease productivity over time.
The total expenditure schedule in Macroland begins with these initial levels (in billions of dollars): Income = 1,000; Consumption = 900; Investment = 200; Government = 300; Net Exports = ?100. If the MPC = 0.75 and income increases in increments of 200, find the equilibrium level of income. If full employment requires an income level of 2,000, what (if anything) should the government do? Indicate both the direction of the spending change and the size of the spending change.
What will be an ideal response?