When the actual unemployment rate is greater than the NAIRU, the inflation rate

In the long run, a higher government deficit does not affect equilibrium real Gross Domestic Product (GDP), so that continuous increases in the government deficit will

A) lead to greater tax revenues. B) reduce spending on privately provided goods and services. C) reduce the price level. D) increase the unemployment rate.

Since Britain withdrew from the ERM in 1992, what has it done with regard to fixing its exchange rates?

A) Britain has joined with the euro, forgoing its long-standing independence. B) Britain has put the pound back on solid footing by backing it with gold. C) Britain has retained its independent pound currency and not joined the currency union of Europe. D) Britain has abandoned its own monetary authority for the certainty of fixed exchange rates with its largest trading partners.