According to Okun's law, if output grew 7% and full-employment output rose 5%, what would be the change in the unemployment rate?
A) -4 percentage points
B) -1 percentage point
C) 1 percentage point
D) 4 percentage points
B
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Consider the demand curves for soft drinks shown in the figure above. A movement from point a to point c represents
A) a decrease in quantity demanded. B) an increase in demand. C) an increase in quantity demanded. D) a decrease in demand.
Assume you save $1,000 in a bank account that pays 8 percent interest per year and the inflation rate is 3 percent. At the end of the year you have earned
A) a nominal return of $50. B) a negative real return. C) a real return of $50. D) a real return of $80.
Given a constant demand, a rise in prices ______.
a. decreases consumer surplus b. increases consumer surplus c. locks consumer surplus into place d. has little effect on consumer surplus
Why does the Federal Reserve System have a high degree of political independence?
(A) The system has only advisory power. (B) The system is owned by the banks. (C) It is divided into geographical districts. (D) The governors are appointed for life terms.