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.
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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.
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