Hello. I would like to get answers for these multiple choice questions. Thank you,

1. As goods markets become more competitive, lowering the markup of prices over costs, we should expect:
   1. No change in the real wage in the medium run.
   2. An increase in the price level and GDP in the medium run.
   3. An increase in the interest rate in the medium run.
   4. No change in GDP in the medium run.
   5. An increase in the real wage in the medium run.

1. Suppose that in the AS-AD model the economy is initially at the natural level of output. An increase in the price of oil will cause in the medium run:
   1. A decrease in the interest rate.
   2. A decrease in GDP and an increase in the price level.
   3. A decrease in GDP and a decrease in the interest rate.
   4. A decrease in the unemployment rate, an increase in nominal wages and an increase in the price level.
   5. A decrease in the price level and no change in GDP.

1. In the Phillips curve, which of the following events will cause an increase in the actual inflation rate?

1. An increase in the expected inflation rate.

2. A fall in the unemployment rate.

3. An increase in the mark up of prices over costs. (m).

4. All of the above.

5. None of the above.

1. Suppose that the expected inflation rate is a function of last year’s inflation rate. Additionally, suppose that the unemployment rate has been above the natural rate of unemployment for several years. Given this information we know that:
   1. The inflation rate will be about zero.
   2. The inflation rate will be constant.
   3. The inflation rate should increase over time.
   4. The inflation rate should fall over time.
   5. The inflation rate will be approximately equal to the natural rate of unemployment.

1. Suppose that the Phillips Curve is given by π_t – π_t-1 = (m + z) – αu_t. Where m = 0.5, z = 3, y α = ½ . Given this information, the natural rate of unemployment is:

1. u_n = 3.5.

2. u_n = 3.0

3. u_n = 1.75.

4. u_n = 7.0.

5. u_n = 0