Which of the following is not true when there is an inflationary gap?
a. Real output exceeds the natural level of real output
b. Employment exceeds full employment.
c. Unemployment exceeds the natural rate of unemployment.
d. All of the above are not true when there is an inflationary gap.
c. Unemployment exceeds the natural rate of unemployment.
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How will the purchase of $100 million of government securities by the Federal Reserve change bank reserves and total checking account deposits in the banking system as a whole? Assume that banks do not hold any excess reserves, that households and
firms do not change the amount of currency they hold, and that the required reserve ratio is 20 percent.
Because of market power, wages are higher under monopsony than under competitive conditions
Indicate whether the statement is true or false
Antitrust problems rarely appear in competitive markets
Indicate whether the statement is true or false
If a good's price is volume sensitive, the consumer will:
A. choose the bundle on the budget line that lies on the lowest indifference curve. B. choose the bundle on the budget line where the budget line is "kinked." C. choose a boundary solution. D. choose the bundle on the budget line that lies on the highest indifference curve.