In the Macroeconomic Short Run

question 385

Multiple Choice

In the macroeconomic short run

• A) actual real GDP may be less than or more than potential GDP.
• B) the unemployment rate is zero.
• C) by definition, the economy is always moving away from full employment.
• D) actual real GDP always equals potential GDP.

Distinguish the operation of probability calculus suited for specific scenarios (conjunction, negation, disjunction).

Recognize the role of bias and evidence in intuitive judgments.

Understand the principles of calculating the probability of independent and dependent events occurring.

Grasp the concept of mutually exclusive vs compatible events and their impact on probability calculations.

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Definitions:

In-The-Money

A term describing an options contract that has intrinsic value; for a call, when the underlying asset's price is above the strike price, and for a put, when it's below.

Put Option

A financial contract that gives the holder the right, but not the obligation, to sell a specified amount of an underlying asset at a set price within a specified time.

Stock Price

The current price at which a particular stock is bought or sold in the market.

Exercise Price

The price at which the holder of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying security.