If people assume that future rates of inflation will ________, they are said to have adaptive expectations
A) not be related to inflation rates of the past B) follow the pattern of inflation rates in the past
C) be higher than inflation rates of the past D) be lower than inflation rates of the past
B
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An increase in aggregate demand tends to cause a ____ a short run Phillips curve at first, then cause a ____ in the short run Phillips curve as people adjust their expectations. a. Movement up along; upward shift
b. Movement up along; downward shift. c. Movement down along; upward shift. d. Movement down along; downward shift.
Capitalism is the economic system that best describes what is currently happening in the world economy
Indicate whether the statement is true or false
When the price of one fruit increases, consumers buy more of another fruit. This situation is an illustration of:
a. The rationing function of prices b. The income effect c. The substitution effect d. Diminishing marginal utility
The monopolistically competitive seller maximizes profit by producing at the point where:
A. total revenue is at a maximum. B. average costs are at a minimum. C. marginal revenue equals marginal cost. D. price equals marginal revenue.