Use the aggregate expenditures model and assume the marginal propensity to consume (MPC) is 0.90 . An increase in government spending of $1 billion would result in an increase in GDP of:

Which of the following is a variable in the equation of exchange?

A) real GDP. B) the velocity of money. C) the money supply. D) the price level. E) all of the above.

Due to the subjective nature of the questions that would be needed to determine if someone is underemployed or a discouraged worker, adjusting the unemployment rate to accurately reflect these situations

A) is very easy to do. B) is somewhat difficult. C) is impossible. D) Since so few people are actually underemployed or discouraged workers, adjusting the unemployment rate to reflect these situations is considered an unnecessary waste of time.