____ 1. An increase in the price of imported cameras is captured by the CPI but not by the GDP deflator.
____ 2. If purchasing power parity holds, the real exchange rate is always equal to 1.
____ 3. The multiplier effect suggests that the increase in aggregate demand could be smaller than the increase in government purchases, while the crowding-out effect suggests that the increase in aggregate demand could be larger than the increase in government purchases.
____ 4. If output is at the ‘potential’ level and employment at the ‘full-employment’ level then cyclical unemployment is zero, but the natural unemployment level can be greater than zero.
____ 5. The velocity of money measures how many times per year the typical dollar coin is used to pay for a newly produced good or service.
____ 6. An economy can increase its real rate of economic growth by increasing consumption and debt creation.