Suppose an economy's exchange rate system is the gold standard and vast tracks of gold are discovered, as is what happened in the United States in 1849. If the economy is at full employment, what should this discovery do?
A) It should lower the money supply and cause deflation.
B) It should raise the money supply and cause inflation.
C) It should raise the money supply and cause disinflation.
D) It should raise the money supply but have no impact on the price level.
E) it should not change the money supply.
B
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After 15 years with Ford Motor Corporation, one summer Cameron loses his job. His boss explained that his position has been downsized after the technological advances in automobile production. Cameron is best considered
A) not in the labor force. B) frictionally unemployed. C) structurally unemployed. D) cyclically unemployed. E) avoidably unemployed.
The price of bananas will increase in response to:
A. an increase quantity of bananas supplied. B. an excess demand for bananas. C. an excess supply of bananas. D. an increase in the supply of bananas.