Once Decision Makers Fully Adjust to an Increase in the General

question 43

Multiple Choice

Once decision makers fully adjust to an increase in the general price level,

• A) the actual rate of unemployment will exceed the natural rate of unemployment.
• B) the actual rate of unemployment will be less than the natural rate of unemployment.
• C) the rate of output will exceed the economy's long-run capacity.
• D) output will return to the full-employment level.

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Definitions:

Unlevered Cost

It involves the cost of funding a project or investment without any debt, reflecting the cost of capital that is equity financed.

Coupon

The yearly interest percentage paid on a bond, relative to its face value.

Tax Rate

The slice of income required as tax from businesses or individuals.

Coupon Rate

The annual interest rate paid by a bond's issuer to its holders, expressed as a percentage of the bond's face value.