New classical economists advocate reducing welfare payments to people who are unemployed or single parents. The economic reasoning uses was that this would ?
Correct answer: B. reduce unemployment
- A. reduce poverty
- B. reduce unemployment
- C. weaken the power of trade unions
- D. help small businesses
Explanation
New classical reasoning treats generous benefits as potentially reducing the incentive to accept work or search for jobs. Cutting them is therefore expected to reduce voluntary or incentive-related unemployment.
Report an error
The more specific you are, the faster it gets fixed. A source beats an opinion.
Prefer email? [email protected]
About Macroeconomics
The economy is studied as a whole through national income, gross domestic product, inflation, unemployment, economic growth and business cycles. Coverage includes aggregate demand and supply, consumption and investment, money and banking, fiscal and monetary policy, exchange rates and balance of payments, which distinguishes macroeconomics from the study of individual markets.
Practise Macroeconomics
1,499 free Macroeconomics MCQs from Economics, each with the correct answer and an explanation. Unlimited attempts, no account needed.
Discussion
Stuck on an option, or know a faster way to get there? Ask or explain it here.
No comments yet. Be the first to explain this one.
Exams that ask Economics questions like this
Economics is on 3 papers prepared for on TestUstad, and all of them draw the same bank, so this question is worth knowing for every one of them.
More Macroeconomics questions
A way of helping depressed regions by having lower wages, lower local taxes and lower unemployment benefit has been suggested as ?
Keynes liquidity preference theory of the interest rate suggests that the interest rate is determined by ?
When supply and demand for money are expressed in a graph with the interest rate on the vertical axis and the quantity of money on the horizontal axis an increase in the price level ?
According to the Laffer curve as tax rates increase tax revenue ?
A group of economists argue that the real problem with the economy is high rates of taxation and heavy regulation that reduce the incentives to work save and invest these economists are ?
The accelerator theory of investment says that induced investment is determined by ?