Exclusion of which of the following tends to understate the true level of unemployment in the economy?
a. Children.
b. Retired persons.
c. Students.
d. People who do not want to work.
e. Discouraged workers.
Question 2
If an economy were experiencing a high rate of unemployment as the result of insufficient aggregate demand, a Keynesian economist would favor:
a. a reduction in taxes coupled with a reduction in government expenditures of equal size.
b. an increase in government expenditures coupled with an increase in taxes of equal size.
c. a reduction in taxes, without any offsetting reduction in government expenditures.
d. maintenance of a balanced budget.
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