Assume that the full-employment level of output is $5000 billion and the natural unemployment rate is 5%. Suppose the current unemployment rate is 8%
What would be the current level of output according to Okun's law (when the Okun's law coefficient is 2)? A) $4500 billion
B) $4700 billion
C) $4900 billion
D) $5000 billion
B
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A White House proposal to lower business taxes by increasing tax deductions is an example of
A) progressive taxation. B) contractionary fiscal policy. C) automatic stabilization. D) expansionary fiscal policy.
The supply of loanable funds schedule shows that the
A) higher the real interest rate, the more the supply of loanable funds curve shifts rightward. B) higher the real interest rate, the greater the quantity of loanable funds supplied. C) higher the real interest rate, the greater the opportunity cost of supplying loanable funds. D) higher the real interest rate, the lower the profit from making new investment. E) lower the real interest rate, the greater the quantity of loanable funds supplied.