Which of the following event(s) most likely will leave prices relatively unchanged while increasing output?
A. an increase in money supply combined with an income tax increase
B. expansionary monetary policy in response to an adverse supply shock
C. expansionary fiscal policy employed after a favorable supply shock
D. restrictive monetary policy in response to an oil price decrease
E. none of these
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If we look at the sacrifice ratios across countries, we find that
A. all industrial nations have approximately the same ratio
B. Japan has a smaller ratio than Germany, France, or the U.S.
C. Germany has a higher ratio than Italy, Australia, or the U.S.
D. no country has a ratio below 1
E. no country has a ratio above 1
Okun's law states that one extra percentage point in unemployment causes
A. a 2 percent fall in GDP
B. a 0.5 percent fall in GDP
C. a 2 percent fall in the rate of inflation
D. a 0.5 percent fall in the rate of inflation
E. a 2 percent increase in the sacrifice ratio
The misery index is constructed by
A. adding the inflation rate and the unemployment rate
B. multiplying the inflation rate with the unemployment rate
C. dividing the inflation rate by the unemployment rate
D. adding the sacrifice ratio and the replacement rate
E. combining the sacrifice ratio with Okun's law
The misery index for the United States
A. increased steadily from 1950 to 1990, but has since declined
B. is closely but inversely related to the successes of the incumbent party
C. is closely and positively related to the successes of the incumbent party
D. is only loosely and inversely related to the successes of the incumbent party
E. none of the above
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