Suppose that everyone who has looked for a job for more than six months gave up in despair and stopped looking. What would happen to the unemployment rate?
a. It would increase.
b. It would fall.
c. It would change, but the effect cannot be predicted.
d. It would not change.
Question 2
Which of the following would occur as a result if Europe experienced a lower inflation rate than the U.S.?
a. European products would become more expensive to U.S. consumers.
b. It would decrease the quantity of European goods demanded by Americans.
c. It would decrease the demand for Euros.
d. None of the above would occur.
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