If the output gap equals 1.8 percent, then:
A. there is significant cyclical unemployment.
B. cyclical unemployment equals the sum of structural and frictional unemployment.
C. there is an expansionary gap.
D. potential GDP exceeds actual GDP.
Answer: C
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Fully anticipated monetary policy actions cannot alter either the rate of unemployment or the level of real GDP. This statement is
A) the nonaccelerating inflation rate of unemployment theory. B) discretionary policy making. C) the policy irrelevance proposition. D) the Phillips curve.
Because of a regulatory environment that encourages foreign participation and competition in financial services, the domestic markets in the __________ are not really distinct from the foreign markets
A) the United Kingdom B) the United States C) Japan D) Germany
The money supply falls from $1,200 billion to $1,160 billion. According to the simple quantity theory of money, the price level will decline by __________ percent
A) 3.33 B) 4.68 C) 5.09 D) 7.65
Refer to the following figure. The price of capital is $50 per unit:
The minimum cost of producing 800 units of output is
A. $10,000. B. $8,000. C. $7,500. D. $6,000.