Unformatted text preview: l unemployment rate is 8
percent. What is the natural rate of unemployment in Okunland?
a) 6 % b) 11 % c) 8 % d) 5 % e) 7 %
39. Stock prices increase when expected future dividends ____, interest rates _____, and/or
the risk premium ______.
a) increase; increase; decreases
d) increase; increase; increases
b) decrease; increase; decreases
e) decrease; decrease; increases
c) increase; decrease; decreases
40. If the frictional rate of unemployment equals 3 percent, the structural rate of
unemployment equals 4 percent, and the cyclical rate of unemployment equals 2
percent, then the natural rate of unemployment equals:
a) 5%. b) 9%. c) 0%. d) 6%. e) 7%.
41. If planned aggregate expenditure (PAE) in an economy equals 2,000 + .8Y and potential
output (Y*) equals 11,000, then this economy has:
a) no output gap.
d) no induced expenditure.
b) an expansionary gap.
e) a recessionary gap.
c) no autonomous expenditure.
42. All of the following would be included in planned aggregate expenditure EXCEPT:
a) planned changes in inventories.
b) social security payments.
c) purchases of services provided by government employees.
d) consumer spending on services.
e) sales of domestically produced goods to foreigners.
43. When an American buys stock in a French company, from the perspective of the United
States this is a(n):
a) export. b) capital outflow c) capital inflow. d) import. e) trade balance. Page 9 of 11 ECO 2013 – Section 0008 – QUIZ IV – Version 1
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