If the current unemployment rate is 5%, under which of the following circumstances would you expect the Fed to use contractionary monetary policy?
A) if the inflation rate is above 5%
B) if the inflation rate is below 5%
C) if the natural rate of unemployment is below 5%
D) if the natural rate of unemployment is above 5%
D
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Answer the next question on the basis of the following production possibilities tables for two countries, Latalia and Trombonia:Latalia's Production Possibilities ABCDEPork (tons)43210Beans (tons)05101520Trombonia's Production Possibilities ABCDEPork (tons)86420Beans (tons)06121824If these two nations specialize on the basis of comparative advantage
A. Trombonia will produce beans and Latalia will produce pork. B. Latalia will produce beans and Trombonia will produce pork. C. Trombonia will produce both beans and pork. D. Latalia will produce both beans and pork and Trombonia will produce neither.
The output gap is the
A) difference in graduation levels between high school and college. B) difference between actual inflation and core inflation. C) percentage deviation of real GDP from potential GDP. D) percentage increase in the growth rate of real GDP. E) percentage increase in the growth rate of real GDP minus the unemployment rate.
A lack of well-established property rights is one of the key reasons why markets fail
a. True b. False Indicate whether the statement is true or false
Moral hazard can be avoided by:
A. removing the asymmetric information. B. employers monitoring employee effort. C. employers incentivizing employees to maintain consistent effort. D. All of these statements are true.