1.The appropriate monetary policy action meant to decrease rapid inflation would be to increase

a. the purchase of treasury securities

b. raising marginal income tax rates

c. the sale of government bonds

d. money supply by reinvesting dividends.

e. government spending through social welfare programs.

2.Assuming velocity of money has risen 2%, what would be the result of a 4% increase in money supply when real output rises 2%?

a. Price level would rise 8%

b. Unemployment would fall 2%

c. Price level would rise 4%

d. Unemployment would rise 4.5%

e. Cannot be determined with the available data.

3.On a short-run Phillips Curve, high rates of inflation coincide with

a. high interest rates

b. low interest rates

c. high unemployment rates

d. low unemployment rates

e. low discount rates.

4.Assuming the total population is 200 million, the labor force is 100 million, and 92 million workers are employed. The unemployment rate is

a. 2%

b. 4%

c. 8%

d. 10%

e. indeterminate.