ECON 2030 Test 3

15. Government subsidised loan programs for college students are most effective in combating unemployment. Structural frictional Seasonal cyclical

A

11. The aggregate demand curve of a country is negatively slop~ because~n increase in the aggregate price level causes the real money supply in the country to __ and nominal interest rates in the country to __ , everything else held constant. Increase;increase increase;decrease decrease;increase decrease;decrease

A

In which of the following situations would it be MOST advantageous to be saving? A) The nominal interest rate is 2 percent and the expected inflation rate is 1 percent. B) The nominal interest rate is 8 percent and the expected inflation rate is 6 percent. C) The nominal interest rate is 14 percent and the expected inflation rate is 18 percent. D) The nominal interest rate is 26 percent and the expected inflation rate is 23 percent. E) The nominal interest rate is 42 percent and the expected inflation rate is 42 percent.

26-23 is 3 so D

11. The unemployment rate in the United States in February 2017 was __ it was in January 2017

??

1. If the aggregate price level increases , the interest rate effect will cause investment to __ and the exchange rate effect will cause the country's exports to __ , everything else held constant. A) decrease; decrease B) increase ; increase C) increase ; decrease D) decrease , increase

A

16. Suppose Jordan is 15 years old, a math wiz, and a full-time student at LSU. Suppose further that he works 20 hours per week, for pay, in the Mathematics Department as a search assistant. According to the BLS household survey, Jordan would be classified as not in the working-age population . employed . not in the labor force. unemployed

A

18. For a given nominal wage, in which of the following situations is the real wage the highest? The inflation rate is -2 percent. The inflation rate is 1 percent. The inflation rate is 5 percent. The inflation rate is 3 percent. The inflation rate is O percent.

A

19. In the last 100 years money has often been called "purchasing power," a phrase which highlights the fact that the holder of money has the ability to command goods and services or to refrain from commanding them-the power inherent in having money. Which of the following functions of money is NOT implied by the phrase "purchasing power? Unit of account. Core of value. Medium of exchange. Standard of value.

A

2. Which of the following is an example of an intermediate good? Cream cheese you purchase for use in baking a cheesecake that you will sell at a school fundraiser . Wood you purchase for use in building a bookshelf for your bedroom. An economics textbook you purchase for class and intend to sell back at the end of the semester . Pizza sauce you purchase for use in making tonight's dinner.

A

22)Suppose a borrower and a lender agree to an interest rate on a loan when the inflation rate is expected to be 4 percent. If the inflation rate actually turns out to be 2 percent over the life of the loan, everything else held constant, then the borrower __ and the lender A) loses; gains B) gains; loses C) loses; loses D) gains; gains E) is unaffected; is unaffected

A

22. Steelworkers laid off from their jobs in the United States as the result of foreign competition Considered ________ unemployed. A)structurally B) frictionally C) cyclically D) seasonally

A

22. Wealth is a __ variable; productivity is a __ variable. A) stock; flow B) stock; stock C) flow; stock D) flow; flow

A

25 . Which of the following types of unemployment is the least detrimental to the macroeconomic .performance of a dynamic market economy? A) Frictional. B) Cyclical. C) Structural. D) Seasonal.

A

3. Suppose 38-year-old Marius was laid off from his job at the local cement factory six weeks ago when it closed for routine maintenance . Suppose further that he has not looked for work during this period , but he expects to be recalled when the plant reopens in three weeks . According to the BLS household survey, Marius would be classified as A) unemployed . B) not in the working-age population. C) employed . D) not in the labor force

A

4. Suppose Akira , a citizen of Japan, purchases a newly-built home in Hawai'i. This purchase, everything else held constant, will cause __ GDP in the United States. A)an increase in the investment (I) component of B)an increase in the net export (X - IM) component of C)an increase in the consumption (C) component of D)no change in E)an increase in the government spending (G) component of

A

4. When a government declares a money to be "legal tender for all debts , public" it is guaranteeing that the money will function as a A) means of unilateral payment. B) medium of exchange . C) unit of account. D) standard of deferred payment. E) standard of value .

A

6. The largest expenditure component of U.S. GDP is A) consumption C) net exports . D) government spending . E) investment.

A

A decrease in foreign income will cause_____ in aggregate demand in the United States and __ in real GDP in the United States in the short run, everything else held constant. a decrease; a decrease a decrease; an increase an increase; an increase an increase; a decrease an increase; no change

A

In which of the following situations is it most advantageous to be saving? The nominal interest rate is 6 percent and the expected inflation rate is 3 percent. The nominal interest rate is 9 percent and the expected inflation rate is 11 percent. The nominal interest rate is 3 percent and the expected inflation rate is 2 percent. The nominal interest rate is 1 percent and the expected inflation rate is 6 percent. The nominal interest rate is 25 percent and the expected inflation rate is 25 percent.

A

Suppose Jean-Claude is a 25-year-old baker who has not worked for the past five weeks because he broke both legs in a skiing accident. During this period Jean-Claude has not been paid nor has he looked for another job , but he expects to be back at his old job within the next month. According to the BLS household survey, Jean-Claude would be classified employed not in the labor force . not in the working-age population . unemployed

A

Suppose at a point in time an economy has a surplus in its labor market. At this time the economy is experiencing frictional , structural , and cyclical unemployment. a zero percent rate of unemployment. only cyclical unemployment. only structural and cyclical unemployment. only frictional and structural unemployment.

A

When a government declares a money to be "legal tender for all debts, __ " it is guaranteeing at the money will function as a __ A) private; standard of deferred payment B) public; medium of exchange C) private; medium of exchange D) private; means of unilateral payment E) public; standard of deferred payment

A

1. Suppose Claudius is a fortytwo year-old father who stays at home schooling his 10-year-old daughter. In the past three weeks he has been applying for part-time evening jobs in order to augment the family income. While he has not received an offer yet, he does have a job interview scheduled for next week. According to the BLS household survey, Claudius would classified as

A)not in the labor force. B)unemployed. C) not in the working-age population. D) employed

14. An open market purchase of government bonds by the Fed will cause __ in bond prices and __ in market interest rates, everything else held constant. decrease; a decrease increase; a decrease decrease; an increase no change; no change an increase; an increase

B

1.Suppose Tess purchases , for use in her home in United States, a new washing machine at her local Sears that was produced in Brazil.Everything else held constant , her purchase causes the __ component of GDP to increase in the United States and the __ component of GDP to increase in Brazil. A)investment; export B)consumption; export C)export; investment D)import ; investment E)import ; consumption

B

10. If an individual transfers funds from a savings account to a small denomination deposit, then the M1 money supply __ and the M2 money supply __ , everything else held constant. decreases; increases remains unchanged ; remains unchanged increases; decreases decreases ; remains unchanged remains unchanged ; increases

B

13. In periods in which the aggregate price level is decreasing , real GDP will grow _______ nominal GDP. A) slower than B) faster than C) as fast as

B

18. Suppose Blair agrees to lend Rory $1000 for one year at a fixed nominal interest rate of 5 percent. Suppose further that they both expect the inflation rate to be 3% over the course of the year. If the actual inflation rate turns out to be 2 percent, Blair will __ and Rory will __ , everything else held constant. be unaffected; be unaffected gain; lose lose; gain gain; gain lose; lose

B

20. In which of the following situations would it be MOST advantageous to be lending? A) The market interest rate is 1 percent and the expected inflation rate is 4 percent. B) The market interest rate is 13 percent and the expected inflation rate is 9 percent. C) The market interest rate is 20 percent and the expected inflation rate is 25 percent. D) The market interest rate is 42 percent and the expected inflation rate is 40 percent. E) The market interest rate is 50 percent and the expected inflation rate is 50 percent.

B

20. Suppose Laura quit her job in Baltimore and moved to New Orleans nine weeks ago. For these nine weeks she has been looking for a job but has not found one yet. At present, Laura would be considered cyclically unemployed. frictionally unemployed. structurally unemployed. seasonally unemployed.

B

21. Cyclical unemployment occurs because A) it takes time to match skilled job seekers with job openings. B) an economy can experience periods of unusually low production. C) there are long-term mismatches between workers' skills and available jobs . D) workers differ in their skills and experience. E) jobs differ in their location, skills required, and working conditions.

B

3. Suppose Rob, an avid golfer , spent a total of $4000 on green fees for the 100 rounds of golf he played in 2009 and a total of $6000 on green fees for the 200 rounds of golf he plated (on the same courses) in 2010. Rob's real consumption of golf in 2010 was __ his consumption level in 2009. A)50 percent higher than B)100 percent higher than C)the same as D)25 percent lower than E) 33.3 percent higher than

B

3. Suppose the inflation rate unexpectedly increases in the United States . Everything else held constant, this will cause the U.S. dollar to become __ desirable relative to the euro and the euro to relative to the dollar . more; depreciate less; appreciate more; appreciate less; depreciate

B

5. Suppose Kristen goes to an ATM machine and withdraws $..40 from her demand deposit account. This action , everything else held constant , will cause bank reserves to __ and the monetary base to __ . remain unchanged ; remain unchanged decrease ; remain unchanged increase ; remain unchanged decrease; decrease decrease ; increase

B

6. Suppose the Fed purchases $1 million of U.S. government bonds from a commercial bank. If commercial banks are making some loans, the purchase will cause the M1 money supply to __ $1 million, everything else held constant. increase by increase by more than decrease by more than decrease by increase by less than

B

8. Suppose the U.S. economy is operating at full employment. A decrease in the money supply will cause __ gap in the short run and __ in the aggregate price level in the long run, everything else held constant. inflationary ; no change a recessionary ; a decrease an inflationary ; a decrease a recessionary ; an increase an inflationary ; an increase

B

9. Suppose Charles spent a total of $350 for the 350 bottles of mineral water he purchased in 2010 and a total of $350 for the 400 bottles of mineral water (same size and brand) he purchased at the same store in 2011. Charles' real consumption of mineral water in 2011 was __ his real consumption level in 2010 and the price of a bottle of mineral water in 2011 was __ the price was in 2010. A) greater than; less than B) less than; greater than C} the same as; less than D) greater than; the same as E) the same as; greater than

B

A surplus in the the labor market is a feature of ___gap. The self-correcting ____ mechanism operates in such a way that this gap will be eliminated, over time, by____labor costs. an inflationary; increases a recessionary; decreases an inflationary; decreases a recessionary; increases

B

Suppose individuals who are receiving unemployment insurance benefit payments experience a permanent cut in their weekly payments. Everything else held constant, this will cause a decrease in which of the following types of unemployment? Cyclical. Frictional. Seasonal. Structural.

B

Suppose the public switches from doing most of its shopping with currency to writing checks on their demand deposit accounts instead . If the Fed takes no action, everything else held constant, the M1 money supply will A) remain unchanged. B) increase. C) decrease.

B

Which of the following would decrease the net export (i.e., exports minus imports)component of U.S. GDP? A)A car produced in Michigan is purchased in Louisiana . B)A camera produced in Japan is purchased in California. C)A bottle of Californian wine is purchased in England. D)A bottle of Romanian mineral water is purchased in Spain

B

15. Answer true or false to the following statement. The largest expenditure component of U.S. GDP is government spending .

B) False.

10. In the 19th century cattle were used in moneyish ways in many societies in east Africa. Among these ways, the number of cattle possessed was used to evaluate the wealth of a man or lineage. Used in this way, cattle were performing which of the following functions of money? Means of unilateral payment. Unit of account. Standard of value. Store of value. Medium of exchange.

C

12. The inflation rate is a __ variable; the unemployment rate is a __ variable . flow; flow flow; stock stock; stock stock ; flow

C

12. Which of the following would increase the investment component of U.S. GDP? A) You purchase a new house in Brazil. B)You purchase 100 shares of General Motors, a U.S. company, stock . C) General Motors, a U.S. company, builds a new factory in Oklahoma . D) You purchase a new washing machine produced in the U.S. to use in your home. E) LSU purchases a new computer produced in the U.S. for Charles to use in his office.

C

13. When a borrower repays a loan by writing a check to the bank for the amount of the outstanding balance, everything else held constant , the __ will __ . monetary base; decrease monetary base; increase money multiplier; decrease money multiplier; increase

C

14. The existence of people working in the underground economy and officially counted as not in the labor force will lead to an officially calculated unemployment rate which __ the problem of unemployment. understates accurately states overstates

C

17. When you compare prices at different stores, money is serving which of the following functions? A) Medium of exchange. B) Store of value. C) Standard of value. D)Of Standard of deferred payment. E) Means of unilateral payment.

C

2. Which of the following would increase the consumption component of U.S. GDP? A) A privately-owned laundromat in Mexico purchases a new clothes dryer produced in the US . B) You purchase 100 shares of Boeing, a U.S. company , stock. C) You purchase a new car produced in England for your personal use. D) You purchase a new house in Hammond, Louisiana. E) LSU purchases a new desk produced in the U.S for Charles' office.

C

22. Inflation is the rate of increase in the unemployment rate. the rate of increase in the aggregate price level. a continual increase in the aggregate price level. a continual increase in nominal GDP. the rate of increase in real GDP.

C

23. When a borrower repays a loan by writing a check to the bank for the amount of the outstanding balance, everything else held constant, the __ will __ A) monetary base; increase D)monetary base; decrease C)money multiplier, decrease D) money multiplier, increase

C

25. Suppose, at a given moment in time, the U.S. economy is operating above full employment. At this moment the economy is experiencing a __ in the labor market. Over time, everything else held constant, real GDP in the United States will __ . A) surplus ; decrease B) shortage; increase C) shortage; decrease D) surplus; increase

C

3. It is difficult to engage in long-term financial planning when inflation rates are adjusted for through indexing . predictable . high and erratic . low and stable .

C

4. A state-funded higher education program, such as TOPS, providing free tuition to qualified students will be most effective in combating __ unemployment. A) cyclical B) seasonal C). structural D) frictional

C

5. Suppose Barbara, a self-employed graphic artist, buys $5000 worth of glossy paper on which she prints brochures for her paying clients. The glossy paper A) would be included in GDP as part of government spending . B) would be included in GDP as part of consumption. C) would not be included in GDP because it is an intermediate good . D) would be included in GDP as part of investment.

C

7. Economic growth is a __ variable ; the M2 money supply is a __ variable. stock ; stock flow; flow flow; stock stock; flow

C

When a government declares a money to be "legal tender for all debts, __ " it is guaranteeing that the money will function as a __ . private; means of unilateral payment public; standard of deferred payment private; standard of deferred payment private; medium of exchange public; medium of exchange

C

1. Suppose Lauren, a self-employed textile artist, buys $1500 worth of lumber at Home Depot To use in building new bookshelves for her home in Mississippi. The lumber would not be included in GDP because it is an intermediate good. would be included in GDP as an export. would be included in GDP as part of investment. would be included in GDP as part of consumption. would be included in GDP as part of government spending .

D

10. Suppose Dorina was fired four weeks ago from her job because she was late for work one too many times. She is now actively seeking a new job that puts less emphasis on punctuality . In this case Dorina would be considered __ unemployed . A) seasonally B) structurally C) cyclically D) frictionally

D

11. The term "business cycle" refers to the A) short-term fluctuations in the unemployment rate. B) long-term trends in economic growth . C) short-term fluctuations in the aggregate price level. D) short-term fluctuations in economic growth. E) long-term trends in the aggregate price level.

D

12. In which of the following situations is it most advantageous to be saving? A) The real interest rate is 13 percent and the expected inflation rate is 17 percent. 8) The real interest rate is 4 percent and the expected inflation rate is 3 percent. C) The real interest rate is 9 percent and the expected inflation rate is 6 percent. D) The real interest rate is 25 percent and the expected inflation rate is 25 percent. E)' The real interest rate is 1 percent and the expected inflation rate is 42 percent.

D

12. Suppose the inflation rate unexpectedly increases in the United States. Everything else held constant , this will cause the U.S. dollar to become __ desirable relative to the euro and the euro to relative to the dollar . A) more; appreciate B) more; depreciate C) less; depreciate D) less; appreciate

D

14. In the United States nominal interest rates tend to move . This means that nominal interest rates decrease when the economy is experiencing __ , everything else held constant. A) procyclically; an expansion B) countercyclically; a recession C) countercyclically; an expansion D) procyclically; a recession

D

15. Structural unemployment occurs because an economy can experience periods of unusually low production. new jobs are created, while old jobs cease to be viable. workers differ in their skills and experience. jobs differ in their location, skills required, and working conditions. here are long-term mismatches between workers' skills and available jobs.

D

18. An economy that is operating at full employment is experiencing A) only cyclical unemployment. B) only structural and cyclical unemployment. C)a zero percent rate of unemployment. D only frictional and structural unemployment. E)no structural unemployment.

D

19. Suppose AJ wants to receive a real interest rate of 3 percent on a one-year loan she is planning to make and she expects the inflation rate to be 6 percent over the coming year . Given her expectations , AJ should charge a nominal interest rate of __ percent on the loan in order to receive her desired real return. A) -3 B) 3 C) 6 D) 9 E) 12

D

19. Suppose a privately-owned commercial laundromat in Mexico purchases a new washing machine produced in the United States. Everything else held constant, this will cause _______ in the net exports of the United States and________ in the investment component of Mexican GDP. a decrease; an increase an increase; no change an increase; a decrease an increase; an increase a decrease; no change

D

20. Suppose the U.S. economy is operating at full employment. A decrease in productivity, everything else held constant, will cause __ in the aggregate price level in the short run and _ _ in real GDP in the long run. A) an increase; a decrease B) no change; no change C) a decrease; no change D) an increase; no change E) a decrease ; an increase

D

20. Suppose your grandmother keeps $3620 in ten dollar bills in an old coffee can in the pantry, behind the peanut butter (and not the sugar). In this situation, the tens are fulfilling which of the following functions of money? A) Means of unilateral payment. B) Unit of account. C) medium of exchange. D) Store of value. E) Standard of value.

D

23. Suppose Szidi is a 16-year-old full-time student who works 18 hours per week , without pay, in her father's commercial apple orchard. Suppose further that for the last four weeks she has been actively seeking a part-time paying job as a translator and is available to start immediately. According to the BLS household survey, Szidi would be classified as A) not in the labor force. B) not in the working-age population. C) unemployed. D) employed.

D

24. In the United States, federal income tax tables are __ . This means that individuals are taxed on their incomes. A) deflated; real B) indexed; nominal C) deflated; nominal D) indexed; real

D

24.Which of the following describes the macroeconomic situation in Oceania in the four quarters listed above? Expansion and inflation Recession and deflation Recession and inflation Expansion and deflation

D

25. Suppose Kenny is fired from his job because he was late for work one too many times. He is now actively seeking a new job that puts less emphasis on punctuality. In this case Kenny would be considered __ unemployed. A) seasonally B) cyclically C) structurally D) frictionally

D

8. Suppose Barbara, a self-employed graphic artist, buys a new colour copier that she uses to produce pamphlets for her clients. This copier would be included in GDP as part of government spending (G) . would not be included in GDP because it is an intermediate good. would be included in GDP as part of consumption (C). would be included in GDP as part of investment (I)

D

9. In which of the following situations is the expected rate of inflation the LOWEST? The real interest rate is -2 percent and the nominal interest rate is 2 percent. The real interest rate is 1 percent and the nominal interest rate is 6 percent. The real interest rate is 5 percent and the nominal interest rate is 5 percent. The real interest rate is 3 percent and the nominal interest rate is 2 percent. The real interest rate is O percent and the nominal interest rate is 3 percent.

D

9. Which of the following types of unemployment is the most detrimental to the macroeconomic performance of a dynamic market economy? A) Structural. B) Seasonal. C) Frictional. D} Cyclical.

D

Steelworkers laid off from their jobs in the United States as the result of foreign competition would be considered __ unemployed . A) frictionally B) cyclically C)seasonally D)structurally

D

Suppose Andrea makes a purchase at her local Williams-Sonoma store using her bank issued credit card. This purchase, everything else held constant , will cause the _______ to ______ money supply ; remain unchanged money multiplier; decrease monetary base; decrease money multiplier ; increase monetary base; increase

D

Suppose Kristen goes to an ATM machine and withdraws $40 from her demand deposit account. This action, everything else held constant, will cause currency in circulation to __ and the M1 money supply to __ A) decrease; increase B) decrease; decrease C)increase ; increase D) increase; decrease E)remain unchanged; remain unchanged

D

Suppose Leslie lost her job when the typewriter factory closed down five years ago and has been unemployed ever since. Mark, on the other hand, lost his job at the day care center when the economy entered a recession, but thinks they will rehire him when the economy picks up again. Leslie would be considered __ unemployed while Mark would be considered __ unemployed. A) cyclically ; structurally B) frictionally; cyclically C)frictionally; seasonally D)structurally; cyclically E) structurally; seasonally

D

The inflation rate is A) a situation in which the money supply growth rate increases continuously . B) long-run fluctuations in economic growth. C) a situation in which the aggregate price level increases continuously . D) the month-to-month percent change in core CPI. E) a situation in which a government runs budget deficits continuously .

D

24. Suppose the U.S. economy is operating at full employment. A decrease in net taxes will cause_______in real GDP in the short run and_____ in the unemployment rate in the long run, everything else held constant. a decrease ; no change a decrease; a decrease a decrease; an increase an increase ; an increase an increase; no change

E

16. For a given nominal wage , in which of the following situations is the real wage the HIGHEST? The inflation rate is O percent. The inflation rate is 1 percent. The inflation rate is 3 percent. The inflation rate is 5 percent. The inflation rate is -2 percent.

E

19.The Fisher effect states that an increase in the __ will cause the __ to __ . A) nominal interest rate; inflation rate; increase B) inflation rate; real interest rate; decrease C) real interest rate; inflation rate; decrease D) nominal interest rate; real interest rate; increase E) inflation rate; nominal interest rate; increase

E

21. Suppose the U.S. economy is operating at full employment. An expansionary monetary policy action by the Federal Reserve will cause______in the aggregate price level in the short run and________in the aggregate price level in the long run, everything else held constant. a decrease; an increase an increase; no change an increase; a decrease a decrease; no change an increase; an increase

E

21. The existence of underemployed workers, who are officially counted as __ , will lead to an officially calculated unemployment rate which __ the problem of unemployment. A) not in the labor force ; understates B) not in the labor force; overstates C) employed; understates D) employed ; overstates E) unemployed; overstates

E

22. Suppose Chris is a 33-year-old mother who has become bored with life at home raising her two-year-old daughter . As a result, she has placed her child in daycare and has been actively seeking employment for the last seven weeks. According to the BLS household Chris would be considered A) not in the labor force ; understates B) not in the labor force; overstates C) employed; understates D) employed ; overstates E) unemployed; overstates

E

4. When a government declares a money to be "legal tender for all debts , public" it is guaranteeing that the money will function as a unit of account. standard of value . standard of deferred payment. medium of exchange. means of unilateral payment.

E

5. Cyclical unemployment occurs because workers differ in their skills and experience. there are long-term mismatches between workers' skills and available jobs . jobs differ in their location , skills required , and working cond itions . new jobs are created , while old jobs cease to be viable . an economy can experience periods of unusually low production.

E

6. Suppose the U.S. economy is operating at full employment. An increase in labor costs, everything else held constant, will cause ________aggregate price level and_______ the unemployment rate in the short run. A) a decrease; a decrease --- B) a decrease; an increase C) an increase; a decrease D)an increase; no change E)an increase; an increase

E

6. Suppose the U.S. economy is operating at full employment. An increase in the expected future aggregate price level, everything else held constant , will cause ______ in____ TODAY . A) a decrease ; aggregate demand B) an increase; aggregate demand C) an increase ; short-run aggregate supply D) an increase ; long-run aggregate supply E) a decrease ; short-run aggregate supply

E

An economy that is operating at full employment is experiencing A) a zero percent rate of unemployment. B) no frictional unemployment. C) no structural unemployment. D) only structural and cyclical unemployment. E) only frictional and structural unemployment.

E

In 1958, Mary Douglas published an article about the economy of the Lele people of the Belgian Congo (today called the Democratic Republic of the Congo). In the article she described the functions of raffia cloth, a well-combed and closely woven cloth of superior quality, in this society. Among its other uses, raffia cloth was given to a skilled craftsman (who was not close relative) in payment for a carved drum or bellows. Used in this way, raffia cloth was serving which of the following functions of money? A) Standard of value. B) Means of unilateral payment. C) Standard of deferred payment. D)Medium of exchange. E) Unit of account.

E

The Federal Open Market Committee (FOMC) expresses its monetary policy stance in terms of its target for the federal funds rate. The federal funds rate is the interest rate charged by A) the federal government on loans to commercial banks in the United States. B) the Fed on loans to commercial banks in the United States. C) the federal government on loans to the Fed. D) the Fed on loans to the federal government. E) U.S. commercial banks on loans to other commercial banks in the United States.

E

23. Answer true or false. The term "business cycle" refers to the short-term fluctuations in the employment rate.

False

7. Answer true or false to the following statement. The Fisher Effect states that increases in optminal interest rates will lead to increases real interest rates.

False

Everything else held constant , an increase in government funding of job retraining programs will be most effective in combating __ unemployment. A)seasonal B) structural C) frictional D) cyclical

Structural

15. Answer true or false to the following statement. According to historical and anthropological evidence , prior to the advent of commodity monies, we do not find any societies in which people primarily depended upon bartering their labor or produce for the produce of others in order to get the necessities of daily life.

True

6. Answer true or false to the following statement. GDP can be calculated by using either the income approach or the expenditure approach because a dollar spent by a buyer is the same as a dollar earned by a seller.

True.