1)Is a decrease in the unemployment rate necessarily a good thing for the nation? Explain.

2)The amount by which an aggregate expenditures schedule must shift upward to achieve the full-employment real GDP is a(n):

A. expenditure multiplier gap

B. negative net export gap

C. recessionary expenditure gap

D. inflationary expenditure gap

1)A decrease in the unemployment rate is a good thing for the nation because it boosts economic growth. With more citizens earning an income, they will pay taxes and buy goods and services, resulting in high and sustainable economic growth. It will also lower inflation since, with increased revenue, the currency does well in the international market. Moreover, it maximizes the output of a nation by achieving production efficiency. It will also reduce the income inequality of a country since income will be distributed amongst citizens. Furthermore, the currency or exchange rates will be stable as a result of steady economic growth. Lastly, it will result in a low government borrowing rate because the budget will be financed by taxes deducted from its workers.

2)

• The correct option is C. Recessionary expenditure gap.

Here, it is given that the aggregate expenditure in the economy is less than the potential GDP level and the aggregate expenditure must shift upward to the right to close this recessionary gap in the economy to stabilize the economy.