Which of the following is true?
a. Inflation and unemployment rates can both increase in the short run in response to negative supply shocks.
b. Inflation and unemployment rates cannot both decrease in the short run in response to reduced aggregate demand.
c. Inflation and unemployment rates can both decrease in the short run in response to positive supply shocks.
d. All of the above are true.
d
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The reason why estimators have a sampling distribution is that
A) economics is not a precise science. B) individuals respond differently to incentives. C) in real life you typically get to sample many times. D) the values of the explanatory variable and the error term differ across samples.
The logic of the budget constraint dictates that an individual's choice must be a point above the actual budget constraint
a. True b. False Indicate whether the statement is true or false
Macroeconomics is best described as the study of:
A. very large issues. B. the choices made by individual households, firms, and governments. C. the nation's economy as a whole. D. the relationship between inflation and wage inequality.
Suppose the United States economy is represented by the following equations: Z = C + I + G C = 500 + .5YD T = 600 I = 300 YD = Y - T G = 2000 a. Given the above variables, calculate the equilibrium level of output. b. Now, assume that government spending decreases from 2000 to 1900. What is the new equilibrium level of output? How much does income change as a result of this event? What is the
multiplier for this economy? What will be an ideal response?