When unemployment is above the natural rate,
A. the inflation rate falls.
B. inflation rises.
C. nominal wages decrease.
D. wage-price spirals occur.
Answer: A
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Macroeconomics, as opposed to microeconomics, includes the study of what determines the level of
A) output of a specific firm. B) employment in the economy. C) employment in a specific industry. D) output of a specific industry.
A(n) ________ in the riskiness of corporate bonds will ________ the price of corporate bonds and ________ the yield on corporate bonds, all else equal
A) increase; increase; increase B) increase; decrease; increase C) decrease; increase; increase D) decrease; decrease;decrease
The Federal Reserve views commercial bank use of the discount window as
A) something to be used only by commercial banks. B) completely up to the borrower. C) a privilege, not a right for eligible borrowers. D) something to be used only in financial panics.
Assume the United States and Australia have the same amount of resources. In a given time period, the United States can produce 2 tons of beef or 200,000 cars. Australia can produce 1 ton of beef or 100,000 cars. This means that
A. Australia has an absolute advantage in both beef and cars. B. Australia has a comparative advantage in cars. C. The United States has an absolute advantage in both beef and cars. D. The United States has a comparative advantage in beef.