1.If interest rates increase then we would expect

Select one:

GDP, inflation and unemployment to all increase

GDP and inflation to decrease and unemployment to increase

GDP, inflation and unemployment to all decrease

GDP and inflation to increase and unemployment to decrease.

2.

If an economy has 2 million people employed and 0.2 million unemployed, then the

Select one:

Unemployment rate is 9%

Unemployment rate is 10%

Labour force participation rate is 10%

Labour force participation rate is 9%

3.If there is an increase in the amount of labour available in an economy then

Select one:

Both SAS and LAS will shift to the left

LAS will shift to the left, but SAS will not move

Both SAS and LAS will shift to the right

LAS will shift to the right, but SAS will not move

4.Starting at long run equilibrium and holding SAS and LAS constant, a decrease in AD will cause a(n)

Select one:

Expansion because actual real GDP will be above potential GDP

Contraction because actual real GDP will be below potential GDP

Expansion because actual real GDP will be below potential GDP

Contraction because actual real GDP will be above potential GDP