Refer to the graph shown. Suppose an economy begins at point B but then adopts an expansionary monetary policy. In the short run, this policy would most likely:
A. raise inflation to 9 percent and raise unemployment to 7.5 percent.
B. raise inflation to 9 percent and reduce unemployment to 4 percent.
C. reduce inflation to 3 percent and reduce unemployment to 4 percent.
D. reduce inflation to 3 percent and raise unemployment to 7.5 percent.
Answer: B
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The natural rate of output is ________
A) independent of the inflation rate B) always lower than potential output C) unrelated to the natural rate of unemployment D) all of the above E) none of the above
Suppose that Venezuela experiences significant capital outflows after a recent election. If the nation had flexible exchange rates, what effect would these flows have had on Venezuela's overall balance and reserves account?
a. Overall balance would rise and reserves account would fall. b. Overall balance and reserves account would both equal zero. c. Overall balance would fall and reserves account would equal zero. d. Overall balance would equal zero and reserves account would fall. e. Overall balance would fall and reserves account would rise.
Currently, union membership in the United States is about what percentage of civilian employees?
A. 10 percent. B. 15 percent. C. 20 percent. D. 25 percent.
All possible combinations of goods that can be purchased at fixed prices with a specific income is
A) a marginal utility curve. B) a total utility curve. C) an indifference curve. D) a budget constraint.