Refer to the given data. If the unemployment rate in the economy fell to 6 percent, we could conclude that:
Answer the question on the basis of the following information for a specific year in a
hypothetical economy for which Okun's law is applicable:
A. only structural unemployment remained.
B. the economy's production possibilities curve shifted outward.
C. the economy had moved from a point inside its production possibilities curve to a point on or very near the curve.
D. nominal GDP would rise, but real GDP would fall.
C. the economy had moved from a point inside its production possibilities curve to a point on or very near the curve.
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You bought two new CDs with the last $30 in your checking account, and your next payday is on Monday. What is the opportunity cost of these CDs?
(A) $30. (B) Dinner and a movie with your friends Saturday night. (C) Knowing you are the first of your friends to have these CDs. (D) The difference between the cost to produce the CDs and the price you paid for them.
If a “liberal” wanted to decrease aggregate demand, which of the following would he or she tend to favor?
A. An increase in government spending, because it will increase the size of the public sector. B. A decrease in government spending, because it keeps the public sector small. C. An increase in transfer payments, because it has a larger multiplier than tax changes. D. An increase in taxes, because it makes the public sector larger.