Question 2A: In the two-sided search model, if the cost of posting a vacancy rises for firms, then

a) labour market participation rises, vacancies fall, and unemployment rises

b) unemployment falls, vacancies fall, and outputs fall

c) labour market participation falls, unemployment rises, and outputs fall

d) labour market participation rises, unemployment rises, and vacancies fall

e) unemployment rises, outputs fall, and vacancies rise

Question 2B: In the two-sided search model, if aggregate output increases vacancies rise, unemployment falls, and the labour force increases, this could be caused by

a) an increase in employment insurance benefits

b) a decline in aggregate productivity

c) an increase in the cost of posting a vacancy

d) a decrease in matching efficiency

e) an increase in matching efficiency

Question 2C: If a central bank has a quadratic loss function and cares about the output gap and deviation from its inflation target, then on a graph with output on the horizontal axis and inflation on the vertical axis, the central bank's indifference curves can be represented as

a) a set of concave curves

b) a set of ellipses

c) a set of straight lines

d) a set of convex curves

e) a set of triangles