What causes the natural rate of unemployment to exist?
What will be an ideal response?
Normal dynamic changes given the institutional arrangements of the economy.
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When the Fed makes an open market ________, the target short-term nominal interest rate will increase, which will ________ GDP
A) purchase; increase B) purchase; decrease C) sale; increase D) sale; decrease
Assume (other things constant) that the Fed increases the money supply. The mechanism through which aggregate demand increases is, according to interest-rate-based transmission mechanism, summarized as follows:
A) the money supply increases ? there is a drop in money balances held ? interest rates increase ? planned investment spending decreases ? aggregate demand increases. B) increase in money supply ? increase in money balances held ? decrease in interest rates ? decrease in planned investment spending ? increase in aggregate demand. C) increase in money supply ? decrease in money balances held ? decrease in interest rates ? increase in planned investment spending ? increase in aggregate demand. D) increase in money supply ? decrease in interest rates ? increase in planned investment spending ? increase in aggregate demand.
What is the equation for Real GDP in terms of labor? Explain the factors that go into each component
Please provide the best answer for the statement.
When marginal utility is negative, total utility
A) increases at a decreasing rate. B) is zero. C) is at its maximum. D) decreases.