If the Fed believes the natural rate of unemployment is 5.5 percent and the natural rate is really 5 percent, what is likely to happen in the short run?
a. The Fed will allow unemployment to be unnecessarily high and output to be unnecessarily low.
b. The Fed will allow unemployment to be unnecessarily high, but output will remain at potential.
c. The Fed will allow unemployment to be unnecessarily low and output to be unnecessarily high.
d. The Fed will allow output to be unnecessarily low, but unemployment will remain at the natural rate.
e. The Fed will allow unemployment to be unnecessarily low and output to be unnecessarily low.
A
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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
A change in nominal GDP sums up changes in
A) prices alone. B) physical production alone. C) physical production and hours of production time. D) physical production and prices.
Which statement is false?
A. American chief executive officers (CEOs) earn on average more than 400 times the salary of the average production worker. B. The effects of globalization has depressed American wage. C. Hourly wages and fringe benefits in the U.S. are the lowest of any industrial country. D. None of the statements are false.
Suppose each of the 50 states had only one gasoline station, and all stations were the same size. The four-firm concentration ratio, based on national data, would be:
A. 0.32. B. 1.0. C. 0.16. D. 0.08.