When an economy is operating at its full employment rate of output:
A. the rate of unemployment will be zero.
B. output will exceed the economy's maximum sustainable rate.
C. the actual rate of unemployment will equal the natural rate.
D. the economy's potential rate of output will exceed actual GDP.
Answer: C
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A tariff is a tax on either imports or exports
a. True b. False
Suppose a Japanese investor purchases a dollar deposit that yields 5 percent interest at the end of a year. What will be the approximate return in terms of yen at maturity if the exchange rate moves from $1 = ¥100 to $1 = ¥105 during the year?
a. 1 percent b. 5 percent c. 10 percent d. 20 percent e. 0 percent
International trade does all the following except
a. allow a country to specialize in producing certain goods and services. b. reduce world output. c. allow a country to move to higher consumption levels. d. increase world output.
For a firm to price discriminate,
a. it must be a natural monopoly. b. it must be regulated by the government. c. it must have some market power. d. consumers must tell the firm what they are willing to pay for the product.