1)When inflation is higher than anticipated we will likely see which of the foll
ID: 1255372 • Letter: 1
Question
1)When inflation is higher than anticipated we will likely see which of the following occurA)People on fixed incomes will suffer
B)The federal reserve will likely increase the money supply
C)Restaurants will print new menus more often
D)Both a and b
E)Both a and c
2)If unemployment were to increase to 20% in the U.S which of the following would economist expect to occur?
A)There would be a increase in the number of families living in poverty
B)More people who are currently unemployed would become discouraged and give up looking for work
C)Real GDP would be flow full employment real GDP
D)All of the above
3)Cyclical unemployment results from
A)A mismatch of skills
B)Being in the wrong geographical location
C)Taking the time to find the best job
D)Seasonal decreases in demand for labor
E)A recession in the economy
4)Fiscal policy focuses on manipulating
A)Aggregate demand to smooth out business fluctuations
B)Aggregate supply to smooth out business fluctuations
C)Both aggregate supply and aggregate demand to smooth out business fluctuations
D)Aggregate demand to stimulate the economy and aggregate supply to contract it
E)hort-run aggregate supply to stimulate the economy and aggregate demand to contract it
Explanation / Answer
1) E 2) D 3) E (Cyclical unemployment occurs when there is not enough aggregate demand in the economy to provide jobs for everyone who wants to work. This is one feature of a recession) 4) A
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