Other things the same, an increase in wages above their equilibrium level
a. increases frictional unemployment but leaves the natural rate of unemployment unchanged.
b. increases frictional unemployment and increases the natural rate of unemployment.
c. increases structural unemployment but leaves the natural rate of unemployment unchanged.
d. increases structural unemployment and increases the natural rate of unemployment.
d
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A borrowed reserves target is ________ because increases in income ________ interest rates and discount loans, causing the Fed to ________ the monetary base, everything else held constant
A) procyclical; increase; increase B) countercyclical; increase; increase C) procyclical; reduce; reduce D) countercyclical; reduce; reduce
A trade deficit refers to a situation where:
A. Government spending (including transfer payments) exceeds tax revenues B. A nation's purchases from other nations are less than its sales to other nations C. Assets are less than liabilities D. Exports are less than imports
The purchasing power parity theory is not a good explanation of how nominal exchange rates are determined in the short run because:
A. there is no evidence that low inflation is associated with less rapid nominal exchange rate depreciation. B. most goods and services are traded internationally and are standardized. C. most nominal exchange rates are fixed and foreign exchange markets do not bring the supply and demand for currencies into equilibrium. D. many goods and services are not traded internationally and not all internationally-traded goods are standardized.
If the price of gasoline were $5, many people would stop buying gasoline while others would continue to do so. This would indicate
A) those who are buying gasoline value it at least $5 per gallon. B) those who are not buying gasoline value it more than $5 per gallon. C) only those who are extremely wealthy are buying gasoline. D) the price of gasoline needs to be regulated by the Federal Government.