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QZ5 studyguide

According to okuns law each extra percentage point of

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Unformatted text preview: induced b) potential c) planned d) actual e) autonomous 24. According to Okun's Law each extra percentage point of ___ unemployment is associated with a ____ percentage point increase in the output gap, measured in relation to potential output. a) structural; 4 b) cyclical; 4 c) frictional; 2 d) cyclical; 2 e) frictional; 4 Page 6 of 11 ECO 2013 – Section 0008 – QUIZ IV – Version 1 O. Mikhail – http://www.bus.ucf.edu/omikhail 25. Market oriented financial systems in countries such as the United States improve the allocation of savings by: a) providing information to savers and helping savers share risks. b) centralizing decision making and lowering costs for borrowers. c) maximizing allocations to risky projects and allowing noneconomic conditions to influence decisions. d) raising interest rates and helping savers assume risk. e) eliminating risk and raising interest rates for savers. 26. If the natural rate of unemployment is 4 percent, what is the actual rate of unemployment if output is 2 percent below potential? a) 8% b) 5% c) 2% d) 4% e) 6% 27. In an open economy, an increase in the perceived riskiness of domestic assets by foreigners, arising, for example, from an increase in political instability, leads to a(n) _______ in the equilibrium domestic real interest rates and to a(n) ____ in the quantity of domestic investment. a) increase; decrease d) decrease; increase b) decrease, decrease e) increase; no change c) increase; increase 28. A fiscal policy acti...
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