Keynesian fiscal policy intended to pull an economy out of a recession might include cutting

Under a fixed exchange rate system, if the real interest rate is at its lower bound and the central bank implements expansionary policy, real GDP will ________ and the output gap will ________

A) increase; increase B) decrease; decrease C) increase; decrease D) not change; not change

Which of the following about unemployment is true?

a. Frictional unemployment implies a lack of available jobs. b. During a recession, cyclical unemployment will be low. c. When an economy is at full employment, actual unemployment will be less than the natural rate of unemployment. d. When actual GDP equals potential GDP, the actual unemployment rate will equal the economy's natural rate of unemployment.

The economy was at point A producing 100X and 200Y. It moved to point B where it produces 200X and 300Y. It follows that

A) point A may have been a point below the economy's PPF, while point B may lie on the PPF. B) the economy's PPF could have shifted outward and point A was a point on the economy's old PPF. C) the economy has moved from one point on its PPF to another point on the same PPF. D) a or b E) a or c

In perfectly competitive markets, economic profits

A. send a signal to other producers to enter the market. B. will decrease the industry supply curve. C. could also be called explicit costs. D. will increase the industry demand curve.