Okun's law shows that when the unemployment rate is above the natural rate,

A) inflation is higher than expected.

B) inflation is lower than expected.

C) output is below potential.

D) output is above potential.

Which of the following is not believed to cause recent increases in wage inequality?

A) international trade

B) contractionary monetary policy

C) skill-biased technological progress

D) all of the above

In the IS-LM-PC model, investment does not depend on

A) T.

B) Y.

C) r.

D) x.

In the short run, a reduction in the price of oil will cause

A) a reduction in output.

B) an increase in the price level.

C) a reduction in the interest rate.

D) all of the above

Human wealth is a function (i.e., affected by changes in) of which of the following variables?

A) future expected income

B) future expected taxes

C) current interest rates

D) all of the above