The natural rate of unemployment
a. is a specific unemployment rate that can be a target for the Fed
b. changes as the inflation rate changes
c. is natural because it does not change from period to period
d. is a measure of the quality of the Fed's performance
e. changes as the efficiency of job searches change
E
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
Holding other factors constant, a technological improvement that increases the marginal product of capital will:
A. decrease national saving. B. decrease investment. C. increase investment. D. increase national saving.
In Figure 3-4, for which of the following would this statement be true: “To get more apples we have to give up wheat.” A movement from
A. A to E. B. C to D. C. D to C. D. D to E. E. B to C.
The Fed can use contractionary monetary policy in an attempt to keep inflation from increasing
Indicate whether the statement is true or false