Which of the following statements are INCORRECT? "When faced with income shocks, household may not be able to smooth their consumption due to credit market exclusion that hinders their ability to borrow." "Any estimate of potential output will have shortcomings, and for this reason, policy makers do not use output gap to make policy decisions." "In the case of a negative aggregate demand shock that brings output below potential, there is no need of central bank intervention as there is no inflationary pressure in the economy." "When the economy is at its potential output, actual unemployment is equal to equilibrium unemployment"

Which of the following statements are INCORRECT? "When faced with income shocks, household may not be able to smooth their consumption due to credit market exclusion that hinders their ability to borrow." "Any estimate of potential output will have shortcomings, and for this reason, policy makers do not use output gap to make policy decisions." "In the case of a negative aggregate demand shock that brings output below potential, there is no need of central bank intervention as there is no inflationary pressure in the economy." "When the economy is at its potential output, actual unemployment is equal to equilibrium unemployment"

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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