When unemployment is below the natural rate,
A. frictional unemployment increases.
B. inflation slows.
C. structural unemployment decreases.
D. the inflation rate increases.
Answer: D
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What will be an ideal response?
If velocity is constant and equal to 5, a $20 billion shift of the LM curve to the right will be produced by a __________ in the money supply
A) $100 billion increase B) $100 billion decrease C) $4 billion increase D) $4 billion decrease
The price used to sell goods or services between subsidiaries in a company is
A) the tax avoidance price. B) set at the marginal cost of the producing subsidiary. C) determined by the minimum of the average cost curve. D) a transfer price.
If the market interest rate increases, then
a. the cost of borrowing increases and so saving falls b. the opportunity cost of consuming a good in the future increases and saving, therefore, increases c. the opportunity cost of consuming a good in the future increases and saving, therefore, falls d. the reward for saving diminishes and so present consumption increases e. the reward for saving increases and so saving increases