1. If the money supply increases 12 percent, velocity decreases 4 percent, and the price level increases 5 percent, then the change in real GDP must be ______ percent.
A. 3
B. 4
C. 9
D. 11
3. If the real return on government bonds is 3 percent and the expected rate of inflation is 4 percent, then the cost of holding money is ______ percent.
A. 1
B. 3
C. 4
D. 7
4. If the fraction of employed workers who lose their jobs each month (the rate of job separation) is 0.01 and the fraction of the unemployed who find a job each month is 0.09 (the rate of job findings), then the natural rate of unemployment is:
A. 1 percent.
B. 9 percent.
C. 10 percent.
D. about 11 percent.
5. If the steady-state rate of unemployment equals 0.125 and the fraction of unemployed workers who find jobs each month (the rate of job findings) is 0.56, then the fraction of employed workers who lose their jobs each month (the rate of job separations) must be:
A. 0.08.
B. 0.125.
C. 0.22.
D. 0.435.
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