According to Okun's Law, if unemployment rises by 5 percent while imports and exports increase at roughly the same rate, the economy will lose output equal to
A. 1 percent.
B. 10 percent.
C. 2 percent.
D. 5 percent.
Answer: B
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An expansion in a country's capital stock is associated with a(n) _____
a. increase in potential GDP b. decline in future consumption c. increase in human capital d. decline in the rate of investment e. increase in national debt
Which of the following contributed to the soaring housing prices during 2002-2005?
a. the Fed's low-interest rate policy b. regulations that reduced the required down payment and other lending standards for home mortgages c. the increased leverage lending by Fannie Mae, Freddie Mac, and large investment banks d. all of the above
If the marginal propensity to save is 0.1 and government spending is raised by $5 billion, then total aggregate spending will rise by:
A. $500 million. B. $5 billion. C. $10 billion. D. $50 billion.
A growth recession is said to occur when the economy grows at a
A. Slower rate in the current year than the preceding year. B. Rate less than that of population. C. Rate less than the long-term average. D. Negative rate.