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Page 5 of 11 eco 2013 section 0008 quiz iv version 1 o

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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. b) inflation. 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. b) diversification. e) allocation. c) risk reservation. 23. The portion of planned aggregate expenditure that depends on output is called ______ expenditure. a)...
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