In: Economics
, which of the following statements is (are) correct?
(x) Unemployment usually rises during the recession phase of the
business cycle.
(y) Although the unemployment rate falls during an expansionary
phase of the business cycle, an unemployment rate of zero is not
obtainable.
(z) In 2011, the unemployment rate in the United States was above 8
percent for the entire year. Historical experience suggests that
this rate is above the natural rate of unemployment, so that
suggests real GDP growth was likely low during 2011.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only
E. (x) only
Which of the following statements is (are) correct?
(x) The model of aggregate demand and aggregate supply explains the
relationship between real GDP and
the price level.
(y) The aggregate demand curve slopes downward because higher
prices cause real wealth to increase,
interest rates to decrease, and consumption to increase.
(z) The effect of an increase in the price level is represented by
a movement upward along the aggregate
demand curve and the quantity demanded decreases as a result.
A. (x), (y) and (z)
B. (x) and (y) only
C. (x) and (z) only
D. (y) and (z) only
E. (x) only
According to the wealth effect and the exchange-rate effect, an
increase in the price level causes
A. the value of money holdings to decrease and net exports to
decrease, respectively.
B. the value of money holdings to increase and net exports to
increase, respectively.
C. the value of money holdings to decrease and net exports to
increase, respectively.
D. the value of money holdings to increase and net exports to
decrease, respectively.
E. None of the above