All of the Following Could Be Used to Support the Argument

question 189

Multiple Choice

All of the following could be used to support the argument that the natural rate of unemployment has fallen in the last ten years except

• A)the proportion of young people in the labor force is shrinking.
• B)because the adult population in prison has doubled since 1985,many people who would normally be counted as unemployed are behind bars.
• C)workers are more insecure because of numerous plant closings and corporate downsizing,and as a result are less likely to quit their jobs to look for work elsewhere.
• D)unemployment insurance has become more generous in the last ten years.

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Definitions:

Autonomous Consumption

The level of consumption spending that occurs when income is zero, reflecting expenditures that consumers must make even when they have no income.

Permanent Income Hypothesis

Formulated by Milton Friedman, it states that the strongest influence on consumption is one’s estimated lifetime income.

Paradox of Thrift

An economic theory suggesting that while saving is beneficial to an individual, increased savings by the entire population can lead to a decrease in aggregate demand, ultimately reducing savings at a macroeconomic level.

Theory of the Leisure Class

A socio-economic theory presented by Thorstein Veblen, which critiques consumerism and status-driven consumption, emphasizing the social uses of wealth and leisure to display status rather than for utility.