Define the natural rate of unemployment and cyclical unemployment
The natural rate of unemployment refers to the amount of unemployment that the economy normally experiences. Cyclical unemployment refers to the year-to-year fluctuations in unemployment around its natural rate.
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If the Fed decides to engage in an open market operation to increase the money supply, what will it do?
a. Sell Treasury bonds, bills, or notes on the bond market. b. Buy Treasury bonds, bills, or notes on the bond market. c. Increase the required reserve ratio. d. Increase the fed funds rate.
If a motorist is stranded in front of a pay phone and has only dollar bills, and he ends up buying a quarter from a passerby for $1,
a. the stranded motorist must not understand that four quarters are worth $1. b. economic theory is unable to explain this transaction. c. both parties have gained from this exchange. d. the passerby was made better off and the motorist worse off.
Which of the following statements is not correct?
a. Two examples of early antitrust laws are the Sherman and Clayton Antitrust Acts. b. Antitrust laws automatically prevent mergers between companies that produce similar products. c. Antitrust laws give the government power to increase competition. d. Antitrust laws can reduce social welfare if they prevent mergers that would lower costs through more efficient joint production.
Financial intermediaries change the mix of output by transferring financial capital from savers to dissavers (borrowers).
Answer the following statement true (T) or false (F)