Macroeconomics 5th Edition by Olivier Blanchard

Exercise 4

Using the information in this chapter, label each of the following statements true, false, or uncertain. Explain briefly.
a. Recently, inflation has been below its historical average in the United States and the European Union.
b. In the 1960s and early 1970s, the United States had a higher rate of unemployment than Europe, but today it has a much lower rate of unemployment.
c. The rate of growth of output per worker in the United States decreased beginning in the mid-1990s.
d. In the mid-1990s, the United States entered a New Economy, in which the growth of output per worker was higher than in the previous two decades and in which similarly high rates of growth (on average) can be expected in the future.
e. China's seemingly high growth rate is a myth, a product solely of misleading official statistics.
f. The European "unemployment miracle" refers to the extremely low rate of unemployment that Europe has been enjoying since the 1980s.
g. The Federal Reserve lowers interest rates when it wants to avoid recession and raises interest rates when it wants to slow the rate of growth in the economy.
h. Even though the United States is the richest country in the world, it borrows hundreds of billions of dollars annually from the rest of the world.