Automatic stabilizers are an example of discretionary fiscal policy.

Suppose the working-age population is 150 million, the labor force is 125 million, and employment is 120 million

a. What is the unemployment rate? b. Now suppose that 2 million students graduate from college and begin to look for jobs. What is the new unemployment rate if none of the students have found jobs yet? c. Suppose that all 2 million students find jobs. What is the unemployment rate now?

Monetarists differ from Classical economists in that they argue that

A) changes in the money supply affect only the price level in the long run. B) velocity is not fixed but is predictable. C) the economy tends to be stable around full employment. D) the demand for money is a fixed fraction of nominal GDP.