The long-run policy prescription that comes from the natural-rate-of-unemployment discussion is:
a. Governments and central banks should adjust monetary and fiscal policies to keep unemployment and inflation as low and predictable as possible.
b. Governments and central banks should use monetary and fiscal policies to keep inflation as low and predictable as possible.
c. Real wages should not be allowed to change in the short run.
d. Fiscal and monetary policies are excellent ways to adjust the natural rate of unemployment.
e. Governments and central banks should use monetary and fiscal policies to keep unemployment as low and predictable as possible.
Question 2
The forward exchange market:
a. Is the market for current delivery.
b. Is the market for current deliveries but future payments.
c. Handles transactions for individuals or companies who would like to reduce foreign exchange risk by locking in exchange rates now.
d. Is a market with no default risk.
e. Provides sufficient liquidity for any maturity and amount.
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