Econ 203 Final Questions

Unemployment rate that would prevail with zero inflation

Rate associated with the highest possible level of GDP

Difference between the LR and SR unemployments

Amount of unemployment the economy normally experiences

None of them are right

Lower than desired prices which increases sales

Higher than desired prices which increases sales

Lower than desired prices which decreases sales

Higher than desired prices which decreases sales

Unmployment rises as the economy moves from A to B

Either fiscal or monetary policy could be used to move the economy from B to A

If the economy is left alone then as the economy moves from B to LR equilibrium the P level would fall farther

All of the above

Increase gov. expenditure

Decreasing tax rates

Increasing MS

All of the above

Only A and B

A and 1

B and 2

C and 3

None of the above

6

4

3

2

1/6

Increase by $40 million and Ms eventually increases by $200 million

Increase by $40 million and Ms eventually increases by $800 million

Decrease by $40 million and Ms eventually decreases by $200 million

Decrease by $40 million and Ms eventually decreases by $800 million

Raise bank rate, make open market sales

Raise bank rate, make open market purchases

Lower bank rate, make open market purchases

Lower bank rate, make open market sales

Nominal int. rate = 4% and unempl. = 3%

Nominal int. rate = 5% and unempl. = -1%

Nominal int. rate = 6% and unempl. = 5%

Nominal int. rate = 10% and unempl. = 3%

None of the above