The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output.
B. government policy.
C. decreasing inflation only.
D. increasing or decreasing inflation.
Answer: D
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The curve shown in the figure above is the
A) potential GDP curve. B) Phillips curve. C) aggregate supply curve. D) demand for money curve. E) aggregate demand curve.
One of the following is a regression example for which Entity and Time Fixed Effects could be used: a study of the effect of
A) minimum wages on teenage employment using annual data from the 48 contiguous states in 2006 . B) various performance statistics on the (log of) salaries of baseball pitchers in the American League and the National League in 2005 and 2006. C) inflation and inflationary expectations on unemployment rates in the United States, using quarterly data from 1960-2006. D) drinking alcohol on the GPA of 150 students at your university, controlling for incoming SAT scores.
If the interest rate is 10 percent, what is the present value of an asset that yields an annual return of $10,000?
a. $1,000 b. $10,000 c. $1,000,000 d. $100,000 e. not enough information to determine
Arun is a job seeker. He notes that although the U.S. unemployment rate has dropped, the frictional unemployment has risen. How should he feel about this news?
a. concerned, because an uptick in frictional unemployment usually corresponds to the start of an economic slowdown b. optimistic, because frictional unemployment often rises when there are a lot of available job opportunities c. ambivalent, because the economy is doing well, but it will probably take him a long time to find a job d. confused, because the frictional unemployment rate almost always mirrors overall unemployment rate