Economic theory suggests that the standard of living of American workers would fall if the
a. knowledge and skills of workers improved, reducing the need for workers.
b. United States had more natural resources.
c. United States turned to more automated methods of production.
d. productivity of American workers declined.
D
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Refer to Table 26-6. Suppose the table above illustrates the values of real and potential GDP and the price level if the Fed does not vote to change their current policy to be more contractionary or expansionary
If the Fed wants to keep real GDP at its potential level in 2017, should the Fed use a contractionary or expansionary policy? Should it raise or lower its interest rate target? How should it conduct open market operations to achieve its goal?
An increase in unemployment benefits is likely to: a. reduce a person's incentive to look for work
b. reduce the opportunity cost of remaining employed. c. provide a better safety net for employed families. d. decrease the tax imposed on consumers. e. increase the need to accept the first job available after becoming unemployed.