The sustainable upper limit of real GDP is a level of GDP that is
A) greater than potential GDP, but by how much greater is unknown and controversial.
B) less than potential GDP, but by how much less is unknown and controversial.
C) potential GDP.
D) determined only by what is the full employment equilibrium in the labor market.
E) None of the above answers is correct because there is no sustainable upper limit to real GDP because real GDP can always be increased.
C
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The Fed's policy actions of reacting to higher inflation by raising the real interest rate during 2004-2006 were
A) upward movements along the monetary policy curve. B) downward movement along the monetary policy curve. C) upward shifts of the monetary policy curve. D) downward shifts of the monetary policy curve.
What is one reason car insurance seems much cheaper than health insurance?
A) Health insurance entails more idiosyncratic than systematic risk, and therefore the gains to diversification are more dramatic. B) Car insurance entails more systematic than idiosyncratic risk, and therefore the gains to diversification are more dramatic. C) Health insurance entails more systematic than idiosyncratic risk, and therefore there are fewer gains to diversification. D) Health insurance is manipulated through market power, and car insurance is not.