The unemployment rate and the level of aggregate output are negatively related.

Irrespective of whether the inflation rate is high or low, if the inflation rate is above the expected level, the unemployment rate in the economy will remain stable

a. True b. False Indicate whether the statement is true or false

If aggregate spending in an economy can be written as Y = 15,000 + 0.6Y - 20,000r, and potential output equals 36,000, what real interest rate must the Federal Reserve set to bring the economy to full employment?

A. 4 percent B. 5 percent C. 2 percent D. 3 percent