Okun's Law posits a relationship between which two variables?
Select one:
a. The interest rate and real GDP
b. The unemployment rate and inflation
c. The unemployment rate and real GDP
d. The unemployment rate and the interest rate
c. The unemployment rate and real GDP
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In order to achieve the maximum gains from trade, people should specialize according to
A) property rights. B) PPF. C) absolute advantage. D) comparative advantage.
When external costs are present in a market,
a. less of the good will be produced than the amount consistent with economic efficiency. b. more of the good will be produced than the amount consistent with economic efficiency. c. the amount of the good produced will be equal to the amount consistent with economic efficiency. d. corresponding external benefits are always generated.
If a local shop buys a used motorcycle for $1,000, makes repairs and refurbishes it, then resells it for $2,500, the
a. shop contributes value added equal to $1,500, but nothing is added to GDP. b. shop contributes value added equal to $1,500, and consequently $1,500 is added to GDP. c. shop contributes nothing to production because only existing goods are involved. d. shop contributes value added equal to $2,500, but only $1,500 is added to GDP.
The expected inflation rate is the inflation rate that people forecast and use to set the? _____ and? _____.
Fill in the blank(s) with the appropriate word(s).