Author Question: Frictional unemployment refers to: a. people who are out of work and have no job skills. b. short ... (Read 41 times)

haleyc112 · **on:** Jun 30, 2018

Frictional unemployment refers to:
a. people who are out of work and have no job skills.
b. short periods of unemployment needed to match jobs and job seekers.
c. people who spend relatively long periods out of work.
d. unemployment related to the ups and downs of the business cycle.

Question 2

Assume the economy is in recession and real GDP is below full employment. The marginal propensity to consume (MPC) is 0.50, and the government follows Keynesian economics by using expansionary fiscal policy to increase aggregate demand (total spending). If an increase of 1,000 billion aggregate demand can restore full employment, the government should:
a. increase spending by 250 billion.
b. decrease spending by 500 billion.
c. increase spending by 1,000 billion.
d. increase spending by 500 billion.