The structural deficit is the deficit at full employment.
Answer the following statement true (T) or false (F)
True
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When constructing a basic macroeconomic model, several assumptions (not realistic, but necessary to simplify the analysis) are made. Which of the following are assumed to be constant?
a. the price level b. the rate of interest c. the foreign exchange rate d. the level of government spending e. All of the above are held constant.
If the Bank of Canada buys government securities from the chartered banks, which of the following transactions take place?
What will be an ideal response?
In the short run, one reason why we do not define "full employment" as 0 percent unemployment is because
A. Of the direct relationship between unemployment and inflation. B. 0 percent unemployment is consistent with price stability. C. The closer the economy gets to capacity output, the greater the risk of inflation. D. Of the vertical aggregate supply curve.
When people retroactively believe that they had accurately foreseen past events, they are illustrating the:
A. Confirmation bias B. Framing effect C. Hindsight bias D. Self-serving bias