Chapter 10: questions
To an economist, Full employment is reached when the unemployment rate drops below
4.5 percent
If all families received the same income, the Lorenz curve would appear as
A diagonal line
To an economist, an individual is living in poverty if
His or her income is below a certain level
Supporters of fiscal policy believe inflation can be reduced by
Increasing taxes
Income that's removed from the economy through consumer savings is called
Leakage
___ million Americans are currently living in povert
More than 30
Monetarist theory
Opposes the use of fiscal policy to affect the economy
When a construction worker cannot work because of winter snowstorm, he is
Seasonally unemployed
The unemployment rate understates employment conditions for all reasons except
Some workers are between jobs for one reason or another
A telephone receptionist loses his job when a computerized voicemail system is installed at his office. He is
Technologically unemployed
Monetarists criticize fiscal policy because
There are lag times between enacting the policy and it's effective date
And economist who attributes inflation to no single group is holding to the
Wage-price spiral theory of inflation
Keynesian economists believe that the Great Depression resulted form
An imbalance in leakages and injections
Monetarist believe the government should
Balance the federal budget
Injections into the economy occur through
Business investment
Monetarist believe that a steady growth in the money supply would result in
Controlled expansion of the economy
An assembly line worker in an automobile plant is laid off during a recession. She is
Cyclically unemployed
To calculate the inflation rate, economists
Divide the change in the price level by the beginning price level and multiplied by 100
One way the government uses fiscal policy to combat unemployment is bg
Decreasing taxes
The excessive monetary growth theory for inflation states: Extra money in the economy is spent, leading to a
Demand- pull effect