13. Assume that the money supply increases at a rate that exceeds the long-run growth of real GDP. Which of the following should occur?

A. The natural rate of unemployment will decrease. B. Inflationary expectations will decrease. C. There will be an increase in the economy's price level. D. The velocity of money will increase. E. There will be an increase in cyclical unemployment.

14. What happens when a country experiences a positive supply shock in the short run?

A. Output increases, unemployment decreases, and the price level decreases. B. Output increases, unemployment increases, and the price level increases. C. Output increases, unemployment increases, and the price level decreases. D. Output increases, unemployment decreases, and the price level remains constant. E. Output increases, unemployment remains constant, and the price level increases.

15. If the multiplier that affects the GDP of a country in response to a change in its taxes is 3, then what is the country's marginal propensity to save?

A. 0.25 B. 0.40 C. 0.67 D. 0.75 E. 0.80

16. Assume that the money market is in equilibrium, with a nominal interest rate of ro. Following a decrease in aggregate demand within the economy, which of the following should occur?

A. The money demand curve will shift right (increase), and the interest rate will decrease. B. The money supply curve will shift left (decrease), and the interest rate will increase. C. The money demand curve will shift left (decrease), and the interest rate will decrease. D. There will be an increase in the equilibrium quantity of money, with an indeterminate impact on the nominal interest rate. E. The money demand will increase, the money supply will decrease, and the interest rate will increase.

17. Which of the following individuals is considered "cyclically" unemployed by economists?

A. Mary, who recently retired and is now doing volunteer work at her church B. Jane, who has just graduated from college and is assessing different accounting job offers C. Charles, who is working 10 hours per week as a waiter, while seeking a better job with more hours D. Edward, who has been laid out from building houses, as a result of fewer housing starts E. Irene, who has turned 18, graduated from high school and has begun searching for her first job