In the market for euros, if the current exchange rate is below the equilibrium rate,
a. the quantity supplied and the quantity demanded for euros are equal.
b. there is an excess supply of euros and the exchange rate will fall.
c. there is an excess demand for euros and the exchange rate will rise.
d. the exchange rate will neither rise nor fall.
e. there is an excess demand for euros and the exchange rate will fall.
C
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Suppose the natural rate of unemployment is 5 percent. If the actual unemployment rate is 4 percent, then the cyclical unemployment rate is
A) -1 percent. B) 1 percent. C) 9 percent. D) 0 percent as cyclical unemployment cannot be less than zero.
Suppose the U.S. population is 275 million. If 210 million people are of working age, 135 million are employed, and 6 million are unemployed, what is the labor force participation rate?
A) 49 percent B) 67 percent C) 64 percent D) 51 percent E) 76 percent
During recessions, government expenditure automatically
A) falls because of programs such as unemployment insurance and Medicaid. B) rises because of programs such as unemployment insurance and Medicaid. C) falls because of the progressive income tax system. D) rises because of the progressive income tax system.
If the real interest rate in the economy is i and the expected rate of return on additional investment is r, then other things equal:
A. more investment will be forthcoming when i exceeds r. B. less investment will be forthcoming when r rises. C. r will fall as more investment is undertaken. D. r will exceed i at all possible levels of investment.