ch9--practice questions

ch9--practice questions - Name: _ Date: _ 1. Short-run...

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Date: _____________ 1. Short-run fluctuations in output and employment are called: A) sectoral shifts. B) the classical dichotomy. C) business cycles. D) productivity slowdowns. 2. Okun's law is the ______ relationship between real GDP and the ______. A) negative; unemployment rate B) negative; inflation rate C) positive; unemployment rate D) positive; inflation rate 3. Long-run growth in real GDP is determined primarily by ______, while short-run movements in real GDP are associated with ______. A) variations in labor-market utilization; technological progress B) technological progress; variations in labor-market utilization C) money supply growth rates; changes in velocity D) changes in velocity; money supply growth rates 4. A 5 percent reduction in the money supply will, according to most economists, reduce prices 5 percent: A) in both the short and long runs. B) in neither the short nor long run. C) in the short run but lead to unemployment in the long run. D) in the long run but lead to unemployment in the short run. 5. The assumption of constant velocity in the quantity equation is the equivalent of the assumption of a constant: A) short-run aggregate supply curve. B) long-run aggregate supply curve. C) price level in the short run. D) demand for real balances per unit of output. Page 1
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ch9--practice questions - Name: _ Date: _ 1. Short-run...

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