The natural rate of unemployment:
a. Is equal to the total of frictional and structural unemployment
b. Means that the economy will always realize its potential output
c. Is a fixed unemployment rate that does not change over time
d. Means that the economy will always operate at its natural rate
a. Is equal to the total of frictional and structural unemployment
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The money supply will grow faster through deposit creation when the legal reserve requirement is
a. high and banks hold excess reserves b. high and banks cannot find good customers to lend to c. low and banks are able to lend out all of their excess reserves d. low and banks are unable to loan out all of their excess reserves e. high and banks are not able to loan out all of their excess reserves
If cross elasticity between two goods is infinite, the goods are
a. perfect substitutes b. perfect complements c. good but not perfect substitutes d. not considered to be substitutes e. produced by the same firm
Which of the following could reduce economic efficiency?
a. laws that encourage lawsuits b. policies that redistribute income c. policies that impose significant restrictions on international trade d. All of the above are correct
Suppose that for every $1 increase in autonomous investment, real GDP demanded rises by $5. Which of the following must be true?
a. The line of aggregate expenditure exactly matches the line of equilibrium. b. Noninvestment expenditures increase with every increase in investment spending. c. The point of equilibrium will decrease with every increase. d. The slope of the aggregate expenditure curve is 5.