Question

1. Which of the following statements are false?

1. The Chinese Government owns more than 10% of the outstanding Federal Government debt
2. The Federal Government plays a significant role in the determination of the amount of US dollars in circulation
3. The unemployment rate and inflation rate always move in opposite directions from each other

Group of answer choices

a. 1, 2 and 3

b. 2 and 3

c. 1 only

d. 1 and 2

e. 3 only

f. 1 and 3

g. 2 only

2. Which of the following would be an example of an automatic stabilizer?

Group of answer choices

a. The increase in unemployment benefits during a recessionary gap

b. The Fed buying bonds during a recessionary gap

c. The increase in social security benefits as the population ages

d. The government increasing taxes during an inflationary gap

e. The government increases expenditures during times of war

3. Which of the following would shift the aggregate demand curve to the left?

Group of answer choices

a. Decreases in taxes, government purchases or money supply

b. Increases in taxes, increases in government purchases, decreases in money supply

c. Decreases in government purchases, decreases in money supply, increases in taxes

d. Increase in government purchases, money supply or gross private investment

4. Which group of people would be characterized as unemployed?

Group of answer choices

a. those who are unwilling to work

b. those who are too young to work

c. those who are unable to find work

d. those who are unable to work

e. those who did not search for work

PLEASE ANSWER ALL 4 MULTIPLE CHOICES LIKE CHEGG SUGGESTS, I WILL GIVE THUMBS UP

Answer 1

1.Option E The unemployment rate and inflation rate always move in opposite directions from each other

Any time aggregate demand in the economy increases or decreases, unemployment changes and so does inflation, but they do so in opposite directions. This is what economists call movement along the Phillips Curve.This is true only in short run. The long-run Phillips curve slopes upward, indicating a positive relationship between the unemployment rate and inflation, whereas the short-run curve slopes downward.

2. Option A The increase in unemployment benefits during a recessionary gap

Automatic stabilizers are features of the tax and transfer systems that temper the economy when it overheats and stimulate the economy when it slumps, without direct intervention by policymakers. Automatic stabilizers offset fluctuations in economic activity without direct intervention by policymakers. During recession people are unemployed and aggregate demand and consumer spending is reduced. Unemployment benefits help to stimulate aggregate demand and increase money supply in the economy thus stimulating the economy.

3.Option B Increases in taxes, increases in government purchases, decreases in money supply

The aggregate demand curve tends to shift to the left when total consumer spending declines. Consumers might spend less because the cost of living is rising or because government taxes have increased. Consumers may decide to spend less and save more if they expect prices to rise in the future. When taxes are increased income of people is reduced. As a result aggregate demand and consumer spending is reduced thus shifting the Aggregate Demand curve towards left showing decrease. Also increase in government purchases erodes off excess money supply in the economy thus decreasing Aggregate Demand.

4.Option C those who are unable to find work

People are classified as unemployed if they do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work. People who are unwilling to work or do not search for work are not considered to be unemployed. Similarly people who are too young and also those who unable to work are not considered unemployed. Unemployment is defined by the Bureau of Labor Statistics as people who do not have a job, have actively looked for work in the past four weeks, and are currently available for work. Also, people who were temporarily laid off and were waiting to be called back to that job are included in the unemployment statistics.