When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand
B. increase; raise; decline
C. decline; lower; decline
D. decline; raise; decline
Answer: B
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In years when teenagers become a greater percentage of the labor force,
A) the natural rate of unemployment falls. B) the natural rate of unemployment rises. C) the inflation rate rises. D) the inflation rate falls.
Some economists believe that the good times of the early 2000s were not sustainable due to:
A. an unsustainable financial bubble. B. higher inflation rates. C. higher deflation rates. D. higher rates of crime.
A sale of U.S. government securities by the Fed causes a(n)
A. expansion of the money supply equal to the amount of the securities sold. B. expansion of the money supply of more than the amount of the securities sold. C. contraction of the money supply equal to the amount of the securities sold. D. contraction of the money supply of more than the amount of the securities sold.
If a country's working-age population declines and its wealth increases, then the labor supply curve
A. shifts to the right. B. shifts to the left. C. shifts to the right if the effect of the change in wealth is bigger than the effect of the change in the working-age population. D. shifts to the left if the effect of the change in wealth is bigger than the effect of the change in the working-age population.