An opportunity cost is:
a. the value obtained when making a choice.
b. the price paid for the choice that is made.
c. what must be given up to obtain something that is desired.
d. what must be given up to obtain something that is not desired.
c. what must be given up to obtain something that is desired.
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If the unemployment rate in the economy is steady at 4 percent per year, how does the short-run Phillips curve predict that the inflation rate will be changing, if at all? What will happen if the unemployment rate now rises to 7 percent per year?
Assume there are no changes to inflation expectations. Provide an appropriate graph to support your discussion.
In the simple deposit expansion model, if the Fed purchases $100 worth of bonds from a bank that previously had no excess reserves, the bank can now increase its loans by
A) $10. B) $100. C) $100 times the reciprocal of the required reserve ratio. D) $100 times the required reserve ratio.
Increases in worker productivity usually reflect
A. growth of labor unions. B. management that pushes workers to work longer and harder. C. elimination of unemployment benefit programs. D. increased education and improved equipment.
Which of the following is NOT a characteristic of a perfectly competitive market?
A. It is difficult for a firm to enter or leave the market. B. The products sold by the firms in the market are homogeneous. C. Each firm is a price taker. D. There are many buyers and sellers in the market.