When the unemployment rate _________ the natural unemployment rate, real GDP is _________ potential GDP and the output gap is _________
A. exceeds; below; negative
B. is below; below; negative
C. exceeds; above; positive
D. is below; above; negative
A When the unemployment rate exceeds the natural unem-ployment rate, the economy is in a recession with real GDP is less than potential GDP so the output gap is negative.
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An increase in the money supply will increase aggregate demand
Indicate whether the statement is true or false
If the Fed conducts an open market purchase of bonds, the
a. money supply decreases as reserves are injected into the banking system b. demand for money increases as reserves are drained from the banking system c. demand for money decreases as reserves are injected into the banking system d. money supply increases as reserves are injected into the banking system e. money supply increases as reserves are drained from the banking system
Supply-side tax cuts tend to benefit the rich because tax cuts
a. on income tend to benefit high income earners more than low income earners. b. on savings benefit high income earners who do most of the personal saving. c. for capital formation tend to benefit those with the means to accumulate capital. d. on capital gains tend to benefit those with larger financial assets. e. All of the above are correct.
In 2012, the imaginary nation of Kanmiw had a population of 8,044 and real GDP of 36,198,000 . In 2013 it had a population of 7,800 and real GDP of 35,880,000 . What was the growth rate of real GDP per person in Kanmiw between 2012 and 2013?
a. -2.2 percent b. -0.7 percent c. 2.2 percent d. 4.5 percent