If unemployment is above the unemployment rate consistent with full employment, then potential GDP is:
A. equal to actual GDP.
B. greater than actual GDP.
C. equal to the GDP gap.
D. less than actual GDP.
Answer: B
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As a result of an initial increase in investment of $200 billion, real GDP increased by $800 billion. Given this information, the expenditure multiplier equals
A) $800 billion. B) 2. C) 1/4. D) 4. E) 6.
Which of the following would be least likely to lead the Justice Department and the FTC to block a proposed horizontal merger?
A) A finding that the resulting firm might be able to unilaterally affect price and output. B) A finding that the potential for entry into the market by new firms would be adversely affected. C) A finding that the potential for coordination among sellers in the market would be enhanced. D) A finding that resulting cost savings and efficiencies would offset any increase in market power.
A new model of a racecar manufactured in Germany sells successfully in China. This will cause the:
a. euro to appreciate against the Chinese Yuan. b. euro to devaluate against the Chinese Yuan. c. Chinese Yuan to appreciate against the euro. d. Chinese Yuan to devaluate against the euro.
Which of the following events, ceteris paribus, would decrease the short-run equilibrium exchange rate for the euro?
a. There is an increase in average U.S. incomes. b. European tariffs decline on imports to Europe from the United States. c. There is an increase in U.S. tastes for European goods. d. U.S. tariffs decline on imports to the United States from Europe.