A large negative output gap
a) represents a shortage of goods due to excessive demand for output
b) is the result of overtime work by the labor force
c) creates inflation
d) means the business cycle is at a peak
e) implies excessive unemployment
e) implies excessive unemployment
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The cost of using an additional unit of an input is called the
A) marginal revenue product. B) marginal physical product cost. C) marginal factor cost. D) marginal product of labor.
If the Fed unexpectedly shifts to a more expansionary monetary policy, which of the following will most likely occur in the short run?
a. a decrease in the real interest rate b. an increase in unemployment c. a decrease in real GDP d. an increase in the nominal interest rate
Under uncovered interest parity, if the domestic interest rate is greater than the foreign interest rate, then exchange rates are:
A) expected to rise. B) expected to stay constant. C) expected to fall. D) uncertain.
Which of the following is true of the short-run aggregate supply curve?
What will be an ideal response?