Econ 1020 Practice Questions

A the economy is overheated b cyclical unemployment

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Unformatted text preview: a. The economy is overheated. b. Cyclical unemployment is high. c. Unemployment is caused by insufficient spending. d. If the economy is in equilibrium, the aggregate expenditure line is too low to create an intersection at the full-employment level. e. If employers hired more workers to reduce unemployment, they would be unable to sell all the extra output those workers would produce. ____ 28. In the short-run macro model, which of the following is the cause of cyclical unemployment? a. It takes time for people to move to new jobs. b. Insufficient aggregate spending. c. It takes time for firms to find new employees. d. It takes time for people to retrain. e. Fewer people want to work than before. ____ 29. If the expenditure multiplier is 10 and investment spending decreases by $1,000 billion, what will be the change in GDP? a. -$10,000 b. $2,500 c. $1,000 d....
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This note was uploaded on 02/07/2014 for the course ECON 1020-02 taught by Professor Rahman during the Spring '13 term at Tulane.

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