According to Okun's Law, if the unemployment rate decreased by 1.75% over a year, the annual growth rate of real GDP was ________
A) 6.5% B) 1.75% C) 3.5% D) 5%
A
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Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher
Suppose the Japanese yen increases in its value relative to the U.S. dollar. In the U.S. economy,
A) the price level will increase and real GDP will fall if the increase in aggregate demand is less than the decrease in aggregate supply. B) the price level will increase and real GDP will fall if the decrease in aggregate demand is more than the increase in aggregate supply. C) the price level will fall and real GDP will increase if the increase in aggregate supply is greater than the decrease in aggregate demand. D) the price level will fall and real GDP will decrease if the decrease in aggregate demand is less than the increase in aggregate supply.
One of the sources of error in the RMSFE in the AR(1) model is
A) the error in estimating the coefficients ?0 and ?1. B) due to measuring variables in logarithms. C) that the value of the explanatory variable is not known with certainty when making a forecast. D) the model only looks at the previous period's value of Y when the entire history should be taken into account.
The market for bagels contains two firms: BagelWorld (BW) and Bagels'R'Us (BRU). The owners of the two firms decide to fix the price of bagels. The table below shows how each firm's profit (in dollars) depends on whether they abide by the agreement or cheat on the agreement. 
Suppose the game above is repeated every day, and both firms adopt the following strategy: cooperate on the first day, then if the other firm cheats, cheat the next day, and if the other firm abides, abide the next day. This type of strategy is known as:
A. a prisoner's dilemma. B. the golden rule. C. the cartel solution. D. a tit-for-tat strategy.