Please write down whether the following statements are true or false, and explain your answer very briefly.

1. At the higher levels of national output where AS curve is nearly vertical, expansionary fiscal policy works better.

2. An appreciation of a country's currency is likely to increase both exports and imports.

3. An open market sale of government securities (such as Treasury Bills) by the Central Bank will decrease the money supply and raise the interest rate.

4. Natural rate of unemployment is the total of frictional unemployment and cyclical unemployment.

5. As a result of sticky wages, we have a low unemployment in the country.

Answer rating: 100% (QA)

1 Answer FALSE When the AS is nearly vertical it implies that the economy is nearly at full employment There is little spare capacity in the economy as it approaches full employment level of output AS ... View the full answer