The potential output of an economy is:
a. the output level at which inflation is very high
b. the output level at which nominal GDP is equal to real GDP.
c. less than the full-employment rate of output.
d. the output level at which total unemployment is zero.
e. also referred to as the natural rate of output.
e
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Which of the following is not a limitation to monetary policy? a. The fact that fiscal policy is sometimes at odds with monetary
b. The world has become global in all markets including financial markets, and the Fed does not have control over international banks or non-member banks. c. Because the Federal Reserve System is made up of twelve branches, it is essentially very difficult to get a decision enacted by the Board of Governors. d. Monetary policy has to be carried out through the commercial banking system.
The current account balance is equal to
A. The trade balance times unilateral transfers. B. Imports minus exports. C. Exports minus imports. D. The trade balance plus unilateral transfers plus net investment income.
A good is said to be "normal" if:
A. it is of high quality. B. consumers buy more of it at a high price. C. it has few substitutes. D. it has a positive income elasticity of demand.
If the quantity supplied of candy increases by 1% when the price of candy increases by 5%, which of the following is TRUE?
A. Supply for candy is inelastic, and price elasticity of supply = 0.2. B. Supply for candy is elastic, and price elasticity of supply = 0.2. C. Supply for candy is inelastic, and price elasticity of supply = 2.0. D. Supply for candy is elastic, and price elasticity of supply = 2.0.