Although the relationship between output and the unemployment rate is not as simple as Okun's Law represents it to be, it is true that
A. a 1% increase in output tends to correspond to a greater than 1% decrease in the unemployment rate.
B. a 1% increase in output will have no effect on the unemployment rate.
C. a 1% increase in output tends to correspond to a less than 1% decrease in the unemployment rate.
D. a 1% increase in output tends to correspond to a 1% decrease in the unemployment rate.
Answer: C
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According to both the equation of exchange and the quantity theory of money
A) an increase in the money supply will decrease real Gross Domestic Product (GDP). B) a decrease in the money supply will decrease the velocity of money. C) a decrease in the money supply will decrease the price level. D) an increase in the money supply will increase real Gross Domestic Product (GDP).
The interdependence among oligopoly firms arises because: a. the products those firms produce are homogeneous
b. the products those firms produce are heterogeneous. c. entry barriers are low. d. a small number of firms produce a large share of industry output.
Under a floating exchange-rate regime, the domestic currency will normally depreciate if the money supply
A. contracts. B. is managed to keep the country's inflation rate steady. C. expands. D. does not change with the change in the exchange rates.
Draw a graph of a market in equilibrium. Describe what might cause a change in demand or supply and how this would affect the diagram. Indicate how the equilibrium price and quantity will change.
What will be an ideal response?