At potential GDP, the economy has an unemployment rate that ______________________.

equals zero
is less than the natural rate of unemployment
equals the natural rate of unemployment
equals full employment

The long-run aggregate supply curve is the relationship between the quantity of real GDP supplied and ________________ when _______________.

real GDP demanded; the unemployment rate is constant
real GDP demanded; the wage rate is constant
the price level; real GDP equals potential GDP
the price level; real GDP equals nominal GDP

Along the short-run aggregate supply curve, __________________.

the real wage rate is constant
real GDP equals nominal GDP
resource prices and potential GDP are constant
real GDP equals potential GDP

Aggregate demand is the relationship between the quantity of ______________.

real GDP demanded and the wage rate
GDP demanded and the wage rate
real GDP demanded and the price level
real GDP demanded and the inflation level

Disposable income _______ when _______.

decreases; aggregate income increases
decreases; taxes decrease
increases; transfer payments increase
increases; transfer payments decrease

An example of monetary policy is an increase in ______________ by the _____________, which ___________ aggregate demand.

taxes; government; increases
the quantity of money; Bank of Canada; decreases
the quantity of money; Bank of Canada; increases
the quantity of money; government; increases

Short-run macroeconomic equilibrium occurs when the quantity of real GDP demanded _______________________.

equals potential GDP
equals full-employment GDP
does not equal full-employment GDP
equals the quantity of real GDP supplied

When the economy is at a below full-employment equilibrium, ______________________.

nominal GDP exceeds real GDP
an inflationary gap exists
a recessionary gap exists
real GDP exceeds potential GDP

At long-run macroeconomic equilibrium, _____________________.

a recessionary gap exists
all resources are employed
an inflationary gap exists
real GDP equals potential GDP

If potential GDP is less than real GDP, then the economy is ______________ equilibrium.

in long-run macroeconomic
at a below full-employment
at an above full-employment
not in short-run macroeconomic

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