The natural unemployment rate is equivalent to all of the following EXCEPT the unemployment rate when:
A. the unemployment rate is zero.
B. there is no output gap.
C. cyclical unemployment is zero.
D. there is only frictional and structural unemployment.
Answer: A
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Consider a small open economy with desired national saving of Sd = 1000 + 1000rw and desired investment of Id = 1000 - 500rw. Calculate national saving, investment, and the current account balance in equilibrium when the real world interest rate is
(a) rw = 0.025. (b) rw = 0.05. (c) rw = 0.0.
The perfectly competitive firm has no influence over price because
A. its output is so insignificant relative to the market as a whole. B. antitrust laws constrain perfectly competitive firms. C. consumers establish the prices of products. D. it doesn’t know its demand curve.
A 2009 article in The Economist noted that
a. recent research has allowed economists to estimate the values of fiscal multipliers with a great deal of precision. b. research on multipliers indicates that multipliers for permanent tax cuts tend to be smaller than multipliers for temporary tax cuts. c. most of the evidence on multipliers for government spending is based on changes in military expenditures. d. All of the above are correct.
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. The economy is currently at Point B. The opportunity cost of moving from Point B to Point A is the
A. 120 LCD TVs that must be forgone to produce 20 additional OLED TVs. B. 30 LCD TVs that must be forgone to produce 40 additional OLED TVs. C. 20 OLED TVs that must be forgone to produce 30 additional LCD TVs. D. 40 OLED TVs that must be forgone to produce 120 additional LCD TVs.