The price level in the economy between 2014 and 2015 rose from 100 to 110. Between 2015 and 2016, the price level rose from 110 to 121. How does the short-run Phillips curve predict the unemployment rate will change as a result?
A) The unemployment rate will increase since inflation increased.
B) The unemployment rate will decrease since inflation increased.
C) The unemployment rate will decrease since inflation decreased.
D) The unemployment rate will not change since there is no change in the rate of inflation.
D
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Because producers do not bear the external cost of pollution
A) private production exceeds the economically efficient level. B) the economically efficient level of production is achieved. C) private production is below the economically efficient level. D) the market price is too high.
Which of the following might the Fed rely on as an intermediate target?
A) The monetary base B) The discount rate C) M2 D) The exchange rate of the dollar
If there is zero search cost, then in the presence of asymmetric information, competitive firms will
A) charge the monopoly price. B) charge the competitive price. C) charge zero price. D) shut down.
Gwen's decision to buy a new television instead of a bicycle for the same price
a. means that opportunity cost is zero since both cost the same amount. b. would not have involved trade-off and opportunity cost if Gwen had decided to put the money in a bank CD instead. c. would not imply a trade-off because of scarcity if Gwen were a multimillionaire. d. means that the opportunity cost to Gwen is the bicycle that she has given up.