ECON 2035 : Old Exam 2
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2) ______: negative; can, positive; can, a decrease; an increase, an increase; an increase. To deal with the deficit problem, suppose the government takes a policy action to reduce the size of the deficits. This policy action will cause ________ in the unemployment rate in the short run and. D) 0. 4 pesos per real: everything else held constant, when a country"s currency appreciates, the country"s goods abroad become. D) 7 percent: the dividend growth rate increases. 8) ______: 4 percent, suppose the economy is producing at the natural rate of output and the government passes legislation that severely restricts a company"s ability to reduce production costs via outsourcing. ________ assets, there is a higher demand for dollar assets and a correspondingly lower demand for foreign assets. 12) _____: rise by 6 percent, fall by 2 percent, foreign; dollar, dollar; foreign, foreign; foreign. 14) _____: a transitory increase in the output gap, changes in expected inflation, supply shocks, irrational.
