Which of the following is necessarily true when an economy is in long-run equilibrium?
a. Prices will be constant (that is, inflation will be zero).
b. The actual output will be less than the full-employment (or potential) output.
c. The actual rate of unemployment equals the natural rate of unemployment.
d. The output of the economy will be greater than the full-employment output.
C
You might also like to view...
The above figure shows the U.S. market for wheat. With international trade, the gain in total surplus is equal to ________
A) area A B) area B + area C C) area D D) area C + area F E) area C + area D + area F
The opportunity cost of increased production of some good can be measured with
a. the slope of a ray to the production possibilities curve. b. the area under the curve of a production possibilities curve. c. the area of the rectangle bounded by the axes and the point on the production possibilities curve. d. the slope of the production possibilities curve. e. All of the above are correct.
As a result of the Fed's unconventional purchase of over $1 trillion of mortgage-backed securities in 2009, interest rates on both mortgage-backed securities and home mortgages increased
a. True b. False Indicate whether the statement is true or false
Which of the following will make the real-world money multiplier smaller than the theoretical formula?
A. Banks actually hold fewer reserves than technically required by the Fed. B. Banks actually make loans for more money than they have in excess reserves. C. Banks may keep some excess reserves rather than loan it all out. D. Consumers spend more than they have using credit cards.