9. An unexpected decrease in the price level, which results in a temporary incre
ID: 1098311 • Letter: 9
Question
9. An unexpected decrease in the price level, which results in a temporary increase in the real wage, can
a. result in an actual unemployment rate that is temporarily less than the natural rate of unemployment.
b. result in an actual rate of unemployment that is temporarily greater than the natural rate of unemployment.
c. increase the natural rate of unemployment.
d. decrease the natural rate of unemployment.
10. We observe a decrease in the price level along with an increase in real GDP. Which of the following is a possible explanation?
a. The expectation of future profits has increased.
b. Aggregate wealth has decreased.
c. the price of raw materials has increased.
d. the stock of capital has increased.
11. The Wall Street Journal reported that bond prices have risen. This is consistent with which of the following statements?
a. An increase in foreign capital inflows.
b. An increase in firms desire to invest.
c. An increase in the government deficit.
d. An increase in personal income taxes.
12. Suppose the inflation rate in the United States is 5.5% over a given year. During this same period, the inflation rate in Great Britain is 4.3%. Assuming purchasing power parity, the U.S. dollar will __________ at a rate of __________ percent against the British pound during this year.
a. appreciate; 1.2%
b. depreciate; 9.5%
c. appreciate; 9.5%
d. depreciate; 1.2%
13. Suppose the U.S. initially has all balance of payments accounts in balance. Then U.S. firms increase the amount they import from Japan, financing that increase in imports by borrowing from Japan. There will now be a current account
a. The US has surplus and a capital account surplus.
b. surplus and a capital account deficit.
c. deficit and a capital account surplus.
d. deficit and capital account deficit.
Explanation / Answer
b. result in an actual rate of unemployment that is temporarily greater than the natural rate of unemployment.
a. The expectation of future profits has increased.
a. An increase in foreign capital inflows.
d. depreciate; 1.2%
c. deficit and a capital account surplus.
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