Sellers can afford to reduce prices because of lower interest rates Sellers can

Sellers can afford to reduce prices because of lower

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Sellers can afford to reduce prices because of lower interest rates. Sellers can afford to reduce prices because inflation is not an issue. Sellers can afford to reduce prices because of the availability of more workers. Less
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30. According to Keynes, what is the only way to bring the economy out of a downturn as severe and prolonged as the Great Depression? 31. The nation is entering a recession. The classical economist says the government should do nothing and the market will correct itself eventually. What would the Keynesian economist suggest? YOUR ANSWER CORRECT ANSWER Level of income Interest rates Inflation levels Availability of labor Less YOUR ANSWER CORRECT ANSWER Financial loans Savings and investment Government intervention Reductions in government spending Less YOUR ANSWER CORRECT ANSWER Increase planned spending by the government Decrease planned spending by the government Increase planned savings by consumers
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32. Why do classical economists believe that the government should not become involved with markets during an economic downturn? 33. If a worker spends 50% of every dollar he earns, what is the worker’s expenditure multiplier? 34. According to Keynes, what should the government do when the economy is booming? YOUR ANSWER CORRECT ANSWER Decrease consumption by consumers Less YOUR ANSWER CORRECT ANSWER They believe that government leaders are not skilled in economics. They believe that it is the responsibility of private firms to solve market issues. They believe that manufacturers will appear weak to overseas competitors. They believe that there is a time lag that makes the coordination of government policies with markets difficult. Less YOUR ANSWER CORRECT ANSWER 1 2 3 4 Less
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Review YOUR ANSWER CORRECT ANSWER The government should increase investments. The government should increase consumption. The government should continue to increase spending. The government should cut spending. Less Unemployment, Inflation, and Economic Fluctuations 14. The maximum number of skilled and unskilled workers are employed in an economy. What type of employment is this? 15. In January, Harry was laid off from his job, and he immediately began seeking employment. In May, he stopped looking for a job. It is now July, and he is still receiving unemployment benefits. How would you classify Harry’s employment status? YOUR ANSWER CORRECT ANSWER Frictional employment Structural unemployment Full employment Cyclical unemployment Less YOUR ANSWER CORRECT ANSWER Underemployed
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