Following questions answer Ture or False:
1. In a self-regulating economy, wages will fall and prices will rise when there is an inflationary gap.
2. The classical economists thought that wages, prices, and interest rates were flexible in both the upward and the downward direction.
3. If the structural unemployment rate is 3 percent, the frictional unemployment rate is 3 percent, and the current unemployment rate is 5 percent, then the economy is in a recessionary gap.
4. A change in autonomous spending leads to a greater change in Real GDP through the multiplier process.
5. In the simple Keynesian model, the aggregate supply curve has a horizontal segment and a vertical segment at full-employment.
6. A structural deficit refers to that part of the deficit that exists as a result of a downturn in economic activity.
7. The distinctive feature of a progressive tax is that the dollar value of tax paid rises as income rises.