I highlighted the ones i thought were right for the first few i need this done in the next hour if not i will take down.

A)MULTIPLE CHOICE QUESTIONS (30 POINTS)

1)Assuming the total population is 200 million, the civilian labor force is 150 million, and 135 million workers are employed, the unemployment rate is:

A) 8 percent.

B) 10 percent.

C) 12 percent.

D) 14 percent.

2)Assuming the total population is 200 million, the civilian labor force is 150 million, and 135 million workers are employed,labor force participation rate is:

A) 10 percent.

B) 30 percent.

C) 50 percent.

D) 75 percent.

3)The type of unemployment associated with skill mismatch is called:

A) frictional unemployment.

B) cyclical unemployment.

C) structural unemployment.

D) seasonal unemployment.

4)Which one of the following is not true according to Classical political economy?

A)Society consists of three social classes:capitalists, workers and landlords

B)Capitalists invest their saving to expand production capacity

C)Wage level is equal to subsistence wage level

D)Investment and saving is function of interest rate

5)Which of the following is not one of feature of Neo-Classical macroeconomic model?

A)All markets are characterized by perfect competition

B)Wages and prices are fully flexible

C)Total production is determined by aggregate demand

D)Consumption is function of interest rate

6)According to the Neo-Classical macroeconomic model, at full employment equilibrium,

A)All unemployment is voluntary

B)All unemployment is unvoluntary

C)Natural rate of unemployment is the sum of frictional and cyclical unemployment

D)There is only frictional unemployment

7)If Martin`s marginal propensity to save (mps) is 0.20, this means that he will

A)Spend eight-tenths of any level of disposable income

B)Save two-tenths of any level of disposable income

C)Marginal propensity to consume for Martin is 0.8

D)All above are true

8)The greater is the marginal propensity to save, the

A)Smaller is the multiplier

B)Higher is the interest rate

C)Higher is the multiplier

D)Smaller is the interest rate

9)If the marginal propensity to consume is 0.75 in an economy, a $200 billion fall in planned investment will

A)increase equilibrium level of income by $800 billion

B)decrease equilibrium level of income by $800 billion

C)decrease saving by $100 billion

D)increase saving by $100 billion

10) If there is unplanned decrease in business inventories at some level of GDP, then GDP

A)is to high for equilibrium

B)may be either above or below the equilibrium output level

C)is to low for equilibrium

D)is overestimated

1)Suppose that an economy at its full employment level of income and unemployment rate equals to the natural rate of unemployment. And suppose that producers become very uncertain and pessimistic about future. They have some worry whether they would be able to sell what they produced, so they cut back on their investment expenditures. In Keynesian Macroeconomic Model the economy will experience a contraction settling at a new, persistent, self-reinforcing, low-income, and high-unemployment equilibrium after a fall in investment spending.

a)Use output, income and spending chain to illustrate high-unemployment equilibrium situation.

b)According to Keynesian macroeconomic model, is there any automatic mechanism that rescue the economy from this situation? Explain briefly.

c)What should government do in this situation? Explain your answer using output, income and spending chain.