If an economy is operating at short-run equilibrium below the full-employment level of real GDP, the self-correction model result is that:
A. unemployment increases.
B. unemployment falls.
C. cyclical unemployment increases.
D. frictional and structural unemployment increase.
Answer: B
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What is the federal funds rate? What are the main determinants of the federal funds rate?
Use the graph below to answer the next question.
Other things equal, a decrease in the price of a substitute resource would cause a
A. move from a to b on D1. B. move from b to a on D1. C. shift from D3 to D2 assuming the output effect exceeds the substitution effect. D. shift from D2 to D3 assuming the output effect exceeds the substitution effect.
Easy monetary policy reduces the real interest rate, which ________ the demand for dollars, ________ the supply of dollars, and ________ the equilibrium value of the dollar.
A. increases; increases; increases B. increases; decreases; increases C. decreases; increases; decreases D. decreases; decreases; decreases
A carbon tax would increase the total volume of greenhouse gases.
Answer the following statement true (T) or false (F)