32. Refer to the in the figure Change in the Demand for U.S. Dollars. The will o
ID: 1128113 • Letter: 3
Question
32. Refer to the in the figure Change in the Demand for U.S. Dollars. The will occur, all other things being equal, if change from DI to D2 all A) interest rates rise in Europe B) interest rates rise in the United States. C) interest rates in the United States and Europe both rise by the same amount. D) U.S. consumers buy m ore goods and services from Europe 33. What type(s) of unemployment may be present when the unemployment rate is equal to its natural rate? A) None B) Structural and Frictional C) Frictional, Cyclical, and Structural D) Cyclical Use the following to answer question 34: Exhibit 30-4 Panel (b) LRAS Price level AD Real GDP 34. Refer to Exhibit 30-4. If policymakers want to use discretionary fiscal policy to eliminate the output gap, which of the following actions would be appropriate? A) decrease wages. B) increase transfer payments such as unemployment compensation. C) raise taxes. D) increase government purchases.Explanation / Answer
33.
B
Structural unemployment and frictional unemployment will be the part of natural rate of unemployment when economy operates at full employment.
34.
C
As per the given graph, the output gap is positive, it means that the government needs to raise the taxes so that economy will be pulled back to full employment level output (potential output).
35.
B
The M1 money includes currency in circulation, checkable deposits and travelers check.
M1 money = 100+300+50 = $450 Billion
36.
B
It is the part of expansionary monetary policy to increase the money supply.
37.
B
A good and stable government with a strong will to promote the private property right is the required for the robust economic growth.
38.
A
Increase in money supply = 50/10 = $500 million
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