Question

1. The natural rate of unemployment is when it is just: A) 0 B) low C) cyclical unemployment D) frictional and structural unemployment

2. The following is false: A) M2 is larger than M1 B) Currency is not the only financial asset considered money C) The FED does not create money D) All of these are true

Answer 1

1. The correct option is D. The natural rate of unemployment is when it is just frictional and structural unemployment. The natural rate of unemployment is the sum of frictional and structural unemployment.

2. The correct option is C. The fed does not create money. The fed controls the money supply and other monetary policies but it does not print money. The fed determines how much money to be printed and the US treasury department prints the money.

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