QUESTION 1:

CAN YOU REPLACEANSWERBY THE REAL ANSWER:

See Okun's relationship as estimated for Spain: Y_t= 1.7 - 0.35X_t

where: Y_trefers to the change in the unemployment rate and X_trefers to the GDP growth rate.

A fall in Spain's GDP of 3.1%, will lead to, on average, an increase in unemployment ofANSWERpercentage points (round to one decimal point).

QUESTION 2 :

The movement from the boom, to the recession, and back to boom is known as the economic output cycle.

Select one: A)True or B)False

QUESTION 3:

If an individual encounters an unexpected income shock, the consumption-smoothing model is often applied. This model suggests that (CHOOSE THREE):

Select one or more:

a. The individual will need to judge whether the income shock is permanent or temporary.

b. The individual will need to consider the constraints they face when dealing with the income shock, such as their ability to borrow.

c. The individual will assess spending decisions in line with long-term considerations.

d. The individual will choose to smooth consumption because of the underlying assumption of increasing marginal returns to consumption.

QUESTION 4

CAN YOU REPLACEANSWERBY THE REAL ANSWER:

CPI inflation (%) -20 -10 10 20 30 0 1875 1880 1885 1890 1895 1900 1905 1910 1918 1915 1920 1925 1930 1929 Depression End of WWI Start of Great End of WWII 1935 Year 1940 1945 1950 1945 1955 1960 1965 1970 1975 1970s 1980 1985 1990 1995 2000 2005 2008 financial crisis Start of global 2010