The Big Mac index uses prices of a common item to predict long-run changes in exchange rates
a. True
b. False
Indicate whether the statement is true or false
True
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Refer to Figure 10.1. If the level of real GDP is initially Y2, firms will ________ production until equilibrium is reached at ________
A) increase; Y2 B) decrease; Y2 C) increase; Y1 D) decrease; Y1
The natural rate of unemployment
a. is constant over time. b. varies over time, but can't be changed by the government. c. is the socially desirable rate of unemployment. d. does not depend on the rate at which the Fed increases the money supply.
Which of the following is NOT an example of positive supply-side policy?
A. Higher marginal tax rates. B. Trade liberalization. C. Improving infrastructure. D. Eliminating excessive government regulation.
Refer to the above data. If this economy were closed to international trade, then the equilibrium GDP and the multiplier would be:
A. $500 billion and 5
B. $500 billion and 4
C. $600 billion and 5
D. $600 billion and 4