If cyclical unemployment is negative, then
A. the natural rate of unemployment is getting smaller.
B. the actual unemployment rate is below the natural rate of unemployment.
C. there have been some errors in classifying the type of unemployment experienced by some people.
D. structural unemployment must be increasing.
Answer: B
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An opportunity cost of economic growth is
A) essentially zero because economic growth leads to such large gains in the long run. B) the decrease in production of consumption goods in the present time period. C) decreased by the creation of capital goods rather than consumption goods. D) so high that places such as Hong Kong have had to do without it.
Explain Purchasing Power Parity
What will be an ideal response?
An increase in the money supply will tend to
A. lower interest rates and lower the equilibrium GDP. B. lower interest rates and increase the equilibrium GDP. C. increase interest rates and increase the equilibrium GDP. D. increase interest rates and lower the equilibrium GDP.
According to the rule of 70, a country will double its real GDP per capita in 10 years if it:
A. experiences a 7 percent growth rate in per-capita GDP. B. has inflation of 7 percent. C. has a population growth rate of 7 percent. D. None of these is true.