Making Use of Okun's Law,it May Be Computed That If

question 74

Multiple Choice

Making use of Okun's law,it may be computed that if the Bank of Canada reduces the money supply 5 percent and the quantity theory of money is true,then the unemployment rate will rise about:

• A) 5 percent in both the short run and the long run.
• B) 2.5 percent in both the short run and the long run.
• C) 5 percent in the short run but will return to its natural rate in the long run.
• D) 2.5 percent in the short run but will return to its natural rate in the long run.

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Definitions:

Homeostasis

The method through which living beings maintain a steady and unchanging state by controlling their internal surroundings.

Motivation

The process that initiates, guides, and maintains goal-oriented behaviors, driving individuals to pursue and achieve objectives.

Aroused, Motivated State

A condition of being mentally and physically activated or energized towards achieving a specific goal.

Physiological Need

Physiological Need refers to basic physical requirements essential for human survival, such as food, water, and shelter, as defined in theories of motivation like Maslow's hierarchy of needs.