The proposition each extra percentage point of cyclical unemployment is associated with about a 2 percent widening of a negative output gap, measured in relation to potential output, is known as:
A. Okun's law.
B. the Fisher effect.
C. the expansionary gap.
D. the recessionary gap.
Answer: A
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As the Indian rupee depreciates relative to the dollar, total spending on Indian goods and assets will increase. Therefore, in the foreign exchange market, the
A) supply curve of euros is downward sloping. B) supply curve of dollars is upward sloping. C) demand curve for euros is upward sloping. D) demand curve for dollars is upward sloping.
An increase in input prices will cause
A) supply to shift rightward, equilibrium price to rise, and equilibrium quantity to fall. B) supply to shift leftward, equilibrium price to rise, and equilibrium quantity to fall. C) supply to shift rightward, equilibrium price to fall, and equilibrium quantity to rise. D) supply to shift leftward, equilibrium price to fall , and equilibrium quantity to rise.
In order to maximize utility, consumers _____
a. continue to make purchases until the marginal utility of each good is zero b. compare the marginal utilities of the last dollar spent on each good c. equate the total utilities of each good consumed d. continue to purchase a good until total utility is equal to zero e. will continue purchasing till diminishing marginal utility is not achieved
If the FOMC purchases government bonds priced at $5,000 from a bond dealer who banks at National Bank, and if the reserve requirement is 20 percent, then the required reserves of National Bank:
a. increase by $5,000. b. increase by $4,000. c. increase by $1,000. d. decrease by $5,000. e. decrease by $1,000.