Figure 10-16
Suppose an economy is currently operating at output Y1 associated with AD1 and SRAS1, shown in . Initially, the output of this economy is
a.
above its potential, and the rate of unemployment is greater than the natural rate.
b.
below its potential, and the rate of unemployment is greater than the natural rate.
c.
above its potential, and the rate of unemployment is less than the natural rate.
d.
below its potential, and the rate of unemployment is less than the natural rate.
b
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When the U.S. real interest rate falls ________
A) U.S. dollar assets earn a higher return relative to foreign assets B) it makes U.S. exports more expensive in foreign currencies C) imports will decrease D) all of the above E) none of the above
Advocates of a progressive income tax use arguments EXCEPT for which of the following?
A) A progressive tax system taxes according to ability to pay. B) A progressive tax system taxes according to benefits received. C) A progressive tax system helps redistribute income away from the rich and towards the poor. D) A progressive tax system maximizes government revenues.