Cyclical unemployment in an economy will be zero when:
a. there is an expansionary gap in the economy.
b. the economy is producing its natural rate of output.
c. there is a recessionary gap in the economy.
d. the actual price level is equal to the expected price level in the economy.
e. the actual price level exceeds the expected price level in the economy.
Question 2
Which of the following changes will shift the money demand rightward?
a. An increase in the price level
b. A decrease in real GDP
c. A decrease in the nominal interest rate
d. An increase in the nominal interest rate
e. A decrease in the price level
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