Author Question: Assume individuals consider only the long run effects of changes in future macro variables when ... (Read 124 times)

penza · **on:** Jun 30, 2018

Assume individuals consider only the long run effects of changes in future macro variables when forming expectations of future output and future interest rates. Suppose current government spending increases and that individuals expect future government spending to increase. Given this information, we know with certainty that

A) current output and the current interest rate will both increase.
B) current output will not change.
C) future expected output will decrease.
D) future expected output will not change.

Question 2

Which of the following individuals would be considered unemployed?

A) an individual who works only part-time
B) an individual who works full-time in a family business, but is not paid
C) an individual who is not working and is not looking for work
D) all of the above
E) none of the above