Unformatted text preview: tion.
e) actual output.
c) labor supply and demand. Page 5 of 11 ECO 2013 – Section 0008 – QUIZ IV – Version 1
O. Mikhail – http://www.bus.ucf.edu/omikhail 18. In Macroland potential output equals $100 billion and the natural rate of unemployment
is 5 percent. If the actual unemployment rate is 3 percent, then the output gap equals:
a) $2 billion. b) -$1 billion. c) $4 billion. d) -$2 billion. e) -$4 billion.
19. When firms preset prices in the short-term, economywide spending changes are the
primary cause of:
a) output gaps.
d) frictional unemployment.
e) the growth of potential output.
c) structural unemployment.
20. In the Keynesian model, a $5 billion increase in autonomous planned investment leads
to ______ in short-run equilibrium output.
a) a greater than $5 billion increase
d) a $5 billion increase
b) no change
e) a $5 billion decrease
c) more than a $5 billion decrease
21. When an American buys stock in a French company, from the perspective of France this
is of a(n):
a) capital inflow. b) capital outflow c) export. d) trade balance. e) import.
22. The practice of spreading one's wealth over a variety of different financial investments
in order to reduce overall risk is called:
a) following the risk premium.
d) the credit crunch.
c) risk reservation.
23. The portion of planned aggregate expenditure that depends on output is called ______
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