When there is a negative output gap, the unemployment rate
A. remains steady.
B. rises.
C. falls.
D. is also negative.
Answer: B
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Assume that an individual with an opportunity cost of time of $20 per hour has to choose between renting four apartments. The rents of the four apartments and the individual's monthly commuting time to work are shown in the following table
Calculate the direct cost, indirect cost, and total cost that the individual will incur if she rents any of these apartments. Also, determine the apartment that is optimum for the individual. Graph the total cost involved for the various choices. Apartment Monthly Commuting Time (hours) Rent ($) 1 60 2,800 2 90 2,200 3 120 1,500 4 150 1,400
The National Monetary Commission
A) was created by Congress to study the setting up of a central bank. B) authorizes open market operations. C) oversees nationally chartered banks. D) chooses Federal Reserve district bank presidents.
A requirement that the budget be balanced in each calendar year is a misguided overreaction to the fear that in some cases
a. budget surpluses can become too large. b. budget deficits can become too large. c. interest rates would rise. d. interest rates would fall.
An economy in which output has decreased and prices have decreased would suggest a:
A. decrease in short-run aggregate supply. B. increase in aggregate demand. C. increase in short-run aggregate supply. D. decrease in aggregate demand.