Suppose There Are Two Economies That Are Identical in Every

question 95

Multiple Choice

Suppose there are two economies that are identical in every way with the following exception. Economy A has an unemployment compensation system while economy B does NOT have an unemployment compensation system. Now suppose both economies experience the same drop in planned investment. Which of the following is correct?

• A) Real GDP will fall more in economy A than in economy B.
• B) Real GDP will fall more in economy B than in economy A.
• C) Real GDP will fall the same in both economies.
• D) The effect on the relative size of the reduction in real GDP in the two economies is ambiguous.

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Definitions:

American Dream

The belief that anyone, regardless of where they were born or what class they were born into, can attain their own version of success in a society where upward mobility is possible for everyone.

Sociologists

Scholars or researchers who study social behavior, institutions, and structures from various perspectives within the field of sociology.

Criticisms

The expression of disapproval of someone or something based on perceived faults or mistakes.

Socioeconomic Status

An individual's or group's position within a hierarchical social structure, often measured by a combination of income, education, and occupation.