In the above figure, a minimum wage of ________ would result in employment of ________

People expect an inflation rate of 5 percent and the real interest rate is positive. Consequently the nominal interest rate will be

A) more than 5 percent. B) 5 percent. C) less than 5 percent. D) Without more information it is impossible to tell if the nominal interest rate will be more than, less than, or equal to 5 percent.

The self-correcting property of the economy means that output gaps are eventually eliminated by:

A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.