1) Which of the following would be considered a leading indicator?

Prime interest rate

Personal income

Money supply

Inventories to sales ratio

Unemployment duration

2) Which of the following actions of the Fed will increase money supply in the U.S. directly?

Purchase U.S. government bonds

Increase the federal funds rate

Increase the reserve requirement

Increase the discount rate

Ban sales of private mutual funds

3) At potential real GDP:

there is zero unemployment.

there is no seasonal unemployment.

there is no frictional unemployment.

unemployment is at its natural rate.

cyclical unemployment equals approximately 5 percent.