Most economists believe that a tradeoff between inflation and unemployment exists
a. only in the short run.
b. only in the long run.
c. in both the short and long run.
d. in neither the short nor long run.
a
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Suppose the representative firm suddenly has less capital at its disposal. What happens to labor demand?
A) It increases. B) It stays the same. C) It decreases. D) We cannot tell.
In the Mundell-Fleming model with a floating exchange rate and perfect capital mobility, an increase in the money supply does all of the following EXCEPT:
a. increase interest rates. b. increase income. c. increase the IS curve. d. increase inflation.
Where interdependence is especially pronounced, competition among oligopolists will
a. resemble military tactics and strategies. b. disappear. c. lead to large increases in product output. d. entice more firms to enter the market.
If the nominal interest rate is 4 percent and expected inflation is 2.5 percent, then what is the expected real interest rate?
a. 1.6 percent b. 10 percent c. 6.5 percent d. 1.5 percent