The relationship between the size of the negative GDP gap and the unemployment rate is:
A. direct.
B. inverse.
C. undefined.
D. direct during recession but inverse during expansion.
A. direct.
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Which of the following is a likely consequence of a fall in private investment?
A) Mortgage defaults fall. B) Asset prices rise. C) Labor supply falls. D) Consumption falls.
The European Union membership criteria includes all of the following EXCEPT
A) the country must participate in free trade with all of its goods and services. B) the country must follow market-based economics. C) the country must formally adopt the EU-wide rules such as technical standards, environmental inspections, banking supervision, etc. D) the country must be a stable functioning democracy. E) None of the above.
Capital outflows in the balance of payments accounts include
a. purchases of financial assets by U.S. residents. b. direct investments in foreign countries. c. indirect investments in foreign countries. d. purchases of U.S. real estate by foreigners. e. all of the above
If a country possesses the absolute advantage in the production of one good:
A. then it must also possess the absolute advantage in the production of the other good. B. then it must also possess the comparative advantage in the production of both goods. C. then it must also possess the comparative advantage in the production of the other good. D. it can produce more of that good given the same resources.