The lower the amount of unemployment benefits citizens receive, the
A) higher the wage people must be offered before they accept a job.
B) the longer people search for jobs.
C) higher the opportunity cost of job search.
D) the higher the natural unemployment rate.
E) lower the opportunity cost of job search.
C
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The relationship between the interest rate and the precautionary demand for money is
A) nonexistent. B) inverse. C) positive. D) positive sometimes and inverse other times.
Refer to Table 26-3. Consider the hypothetical information in the table above for potential real GDP, real GDP, and the price level in 2016 and in 2017 if the Federal Reserve does not use monetary policy
If the Fed uses monetary policy successfully to keep real GDP at its potential level in 2017, which of the following will be lower than if the Fed had taken no action? A) real GDP and the inflation rate B) real GDP and potential GDP C) potential GDP and the inflation rate D) real GDP and the unemployment rate