Determine and write in the space provided whether each of the following statements is true, false, or uncertain. If the statement is false or uncertain, correct the statement to make it true. 1. Based on Okun's law, the growth rate of real GDP in the long run is determined by aggregate demand. (Please include the relevant formula in the definition of Okun's law). 2. The self-correcting mechanism relies on the adjustment of interest rate to remedy business cycle fluctuations and to move the economy back to long run equilibrium 3. In the Mundell-Fleming model, output or income is determined by the real interest rate.

Determine and write in the space provided whether each of the following statements is true, false, or uncertain. If the statement is false or uncertain, correct the statement to make it true. 1. Based on Okun's law, the growth rate of real GDP in the long run is determined by aggregate demand. (Please include the relevant formula in the definition of Okun's law). 2. The self-correcting mechanism relies on the adjustment of interest rate to remedy business cycle fluctuations and to move the economy back to long run equilibrium 3. In the Mundell-Fleming model, output or income is determined by the real interest rate.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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