Author Question: Suppose the economy has a high level of unemployment. This would imply A) that the economy is ... (Read 126 times)

brutforce · **on:** Jun 30, 2018

Suppose the economy has a high level of unemployment. This would imply

A) that the economy is operating on the SRAS curve and that government spending could be decreased to reduce unemployment.
B) that the government should engage in expansionary fiscal policy and increase the tax rate.
C) that fiscal policy has been ineffective and should be abandoned.
D) that the economy is operating to the left of the LRAS curve and that government spending could be increased to reduce unemployment.

Question 2

Refer to the above figure. If real disposable income is less than 5,000, then saving is

A) negative.
B) 0.
C) positive.
D) none of the above: cannot be determined with the given information.