Answer to Question #110501 in Macroeconomics for Mohammed Rimon

Question

True or false questions:
1. The horizontal intercept of the Okun’s Law curve for an economy is
that economy’s NAIRU.

2.Liquidity traps can be caused by large negative shocks to the level of
aggregate demand such as is currently occurring in response to
Covid19 virus. __________


3.The concept of “factor price equalization” is directly related to the
“interest rate parity condition” as used in the Mundell-Fleming open
economy macro model.

4. According to the Mundell-Fleming variant of the IS-LM macro model
the effect of an expansionary fiscal policy on the level of fixed
investment is uncertain.

Answer 1

1.false

2.true

3.true

4.false