Generally, in the United States today, goods inflation:
A. under 5 percent is considered acceptable.
B. that is negative is preferable.
C. under 2.5 percent is considered acceptable.
D. at zero is considered acceptable.
Answer: C
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At the economy's natural rate of unemployment
A. only frictional unemployment exists. B. there is only a relatively small amount of cyclical unemployment. C. only structural unemployment exists. D. the economy is fully employed.
Between 1866 and 1914, statistical evidence suggests that many big businesses depended heavily on U.S. protectionist policies
Indicate whether the statement is true or false
Interest payments on home mortgages and home equity loans are tax deductible. This tax deductibility encourages households to
a. shift other forms of debt to their home mortgage. b. increase the equity in their house. c. make larger payments and pay down their mortgage loan more rapidly. d. decrease the overall amount of household debt in relation to household income.
If an economy operates at a short-run equilibrium output that exceeds its long-run capacity, which of the following will be most likely to direct the economy toward full employment?
a. Improvements in technology will shift the LRAS curve to the right. b. Resource prices will increase, causing the SRAS curve to shift to the left. c. The unemployment rate will increase, causing the economy's aggregate supply curve to shift to the right. d. Interest rates will decline, shifting the aggregate demand curve to the right.