Question

________ unemployment changes slowly and depends on ________.

Select one:

a. Frictional; the rate at which people enter and exit the labor force

b. Seasonal; the rate at which people enter and exit the labor force

c. Frictional; the skills of the unemployed

d. Structural; the inflation rate

e. Structural; the rate at which people enter the labor force

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An increase in nominal GDP could result from an increase in
i. production.
ii. prices.
iii. subsidies.

Select one:

a. i and ii

b. i only

c. i, ii, and iii

d. ii only

e. i and iii

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As the money wage rate increases,

Select one:

a. potential GDP increases.

b. potential GDP decreases.

c. aggregate supply increases.

d. aggregate supply and potential GDP do not change.

e. aggregate supply decreases.

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Cost-push inflation starts with

Select one:

a. an increase in aggregate supply.

b. an increase in aggregate demand.

c. an increase in potential GDP.

d. a decrease in aggregate supply.

e. a decrease in aggregate demand.

Answer 1

a) Frictional unemployment rate changes slowly and it depends on the rate at which people enter and exit the labor force. The answer is "A".

b) "D" nominal GDP could increase due to an increase in the price.

c) "E" as the money wage increase the aggregate supply in the short run shifts to the left i.e. decrease.

d) "D" a decrease in the aggregate supply will start the cost push inflation.