Question

Why is it in the interest of politicians to promote the notion that unemployment can be...

Why is it in the interest of politicians to promote the notion that unemployment can be lowered if federal spending is increased?

Homework Answers

Answer #1

A politician will promote the fact that the increase in the government spending will increase the output in the economy because it acctually does, federal spending can increase the aggregate demand in the economy as it is part of the aggregate demand. A higher aggregate demand will increase the price, at a higher price the real wages will be low and the firm in the market will hire more at a lower real wage. It will increase the employment.

Moreover, it will increase the spending in the market and encourage investment , with higher investment people will employ more and that will decrease the unemployment in the economy.

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Should the Federal Reserve primarily focus on inflation or unemployment? Why?
Should the Federal Reserve primarily focus on inflation or unemployment? Why?
When unexpected inflation is zero, the corresponding unemployment rate is the _____ unemployment rate. A. minimum...
When unexpected inflation is zero, the corresponding unemployment rate is the _____ unemployment rate. A. minimum B. zero C. maximum D. equilibrium How is monetary policy different from fiscal policy? A. Monetary policy adjusts interest rates, whereas fiscal policy adjusts government spending and taxes. B. Monetary policy focuses on correcting inflation, whereas fiscal policy focuses on unemployment. C. There is no difference between the two policies. D. Monetary policy is determined by the president, whereas fiscal policy is determined by...
If the economy began at potential output when a negative aggregate demand shock hit, what would...
If the economy began at potential output when a negative aggregate demand shock hit, what would be the traditional monetary policy action to stabilize output? lower interest rates to increase spending and shift the AD curve to the right lower interest rates to increase spending and shift the AD curve to the left increase interest rates to increase spending and shift the AD curve to the right lower interest rates to decrease spending and shift the AD curve to the...
why do output and employment sometimes falls and how can unemployment be reduced ?
why do output and employment sometimes falls and how can unemployment be reduced ?
Explain the difference between the Labor Force Participation Rate and the Unemployment Rate. Why can the...
Explain the difference between the Labor Force Participation Rate and the Unemployment Rate. Why can the Unemployment Rate increase during a change from bad economic to good economic conditions?
REVIEW: List ways that parents can promote their adolescent’s academic achievement. Explain why each is effective....
REVIEW: List ways that parents can promote their adolescent’s academic achievement. Explain why each is effective. REVIEW: Describe the distinct positive functions of friendships, cliques, and crowds in adolescence. What factors lead some friendships and peer-group ties to be harmful?
Why is the level of investment spending inversely related to the level of the interest rate?...
Why is the level of investment spending inversely related to the level of the interest rate? Can you think of any consumer spending components that may also depend on the interest rate? Explain your answer
Topic: Why is unemployment so high in Europe? Briefly discuss. Optional reading: You can use any...
Topic: Why is unemployment so high in Europe? Briefly discuss. Optional reading: You can use any Web browser to search for the words “European unemployment.” Just by scanning the headlines, see how many possible explanations you can list. Why Is Unemployment So High in Europe? Between World War II and the mid-1970s, unemployment in Western Europe was low. From 1960 to 1974, for example, the unemployment rate in France never got as high as 4 percent. The worldwide recession of...
. The term stagflation refers to an economy: a.with hyperinflation, but low unemployment b.with low inflation,...
. The term stagflation refers to an economy: a.with hyperinflation, but low unemployment b.with low inflation, but expanding capital stock. c. that is experiencing stagnated technology growth, but no inflation . d. that is not growing, but has inflation. Stagflation is the result of: a. a decrease in long-run aggregate supply. b. an increase in short-run aggegate supply. c. an increase in long-run aggregate supply. d. a decrease in short-run aggregate supply. Which of the following events could cause stagflation?...
Some politicians, labor unions, and special interest groups argue that US trade deficits are harmful to...
Some politicians, labor unions, and special interest groups argue that US trade deficits are harmful to the economy and nations that run large trade surpluses with the US are benefiting from unfair trade practices and agreements. These parties support increasing tariffs on imports, elimination, or re-writing of trade agreements. Respond to the following in a minimum of 275 words: Discuss what credible economists say about the effects that tariffs, changing trade agreements, and/or manipulating exchange rates will have on the...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT