A difficulty faced by policymakers who wish to use the unemployment rate as a guide to whether the economy is weak or strong is that
A. the natural rate of unemployment is hard to measure.
B. policymakers must use data on output to tell whether the unemployment rate is too high or too low.
C. the impact of policy on the economy is subject to long and variable lags.
D. the natural rate of unemployment almost never changes.
Answer: A
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When determining equilibrium using supply and demand, the concept of ceteris paribus is used. The term ceteris paribus means:
a. other things being equal. b. allowing things to change. c. other things being different. d. time and space considered.
In a competitive price-searcher market, the firms will
a. be able to choose their price, and the entry barriers into the market will be low. b. be able to choose their price, and the entry barriers into the market will be high. c. have to accept the market price for their product, and the entry barriers into the market will be low. d. have to accept the market price for their product, and the entry barriers into the market will be high.
When there is a surplus
A. quantity demanded is greater than quantity supplied. B. quantity supplied is greater than quantity demanded. C. quantity demanded is equal to quantity supplied.
For a given real exchange rate, a nominal appreciation of the domestic currency will result from
A. an increase in the price of the domestic good. B. a decline in the terms of trade. C. an increase in the price of the foreign good. D. an increase in the domestic rate of inflation.