The GDP deflator is a measure of the price level which is calculated as nominal GDP divided by real GDP and multiplied by 100
Indicate whether the statement is true or false
TRUE
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A trough in the business cycle occurs when
A. the inflation rate is at its lowest level. B. the natural rate of unemployment is at a minimum point. C. cyclical unemployment is at a minimum point. D. employment and output reach their lowest levels.
When the Fed ________ securities in an open market operation, banks' reserves ________, and therefore lending ________
A) sells; increase; increases B) buys; increase; increases C) sells; decrease; increases D) buys; decrease; decreases E) buys; do not change; does not change
In which of the following economic theories is it possible for an increase in the money supply to lead to a decrease in Real GDP in the short run?
A) Keynesian theory B) Monetarist theory C) New classical theory D) a and b E) a and c
Critics of minimum wage laws argue that such laws will end up hurting people with ________ skill levels because these laws interfere with the smooth functioning of the labor market and create ________.
A. higher; unemployment B. higher; a shortage of labor C. lower; unemployment D. lower; a shortage of labor