If the Phillips Curve exists in reality, what dilemma does this create for fiscal and monetary policies? Explain.
What will be an ideal response?
The dilemma is that an expansionary fiscal and monetary policy aimed at reducing unemployment may cause inflation, and vice versa for policies aimed at reducing inflation. If there truly is a trade off, then successful elimination of unemployment cannot be accomplished without creation of inflation; likewise, stable prices occur only in the presence of some unemployment.
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The above figure shows the payoffs to two airlines, A and B, of serving a particular route. Is there a Nash equilibrium? What is it? Explain
What will be an ideal response?
Comparing the median income of all white males to the median income of all black males in order to determine the impact of job-market discrimination on earnings tends to
a. overestimate the impact because it does not account for differences in education and job experience b. underestimate the impact because it does not account for differences in education and job experience c. overestimate the impact because it accounts for differences in education and job experience d. underestimate the impact because its accounts for differences in education and job experience e. correctly estimate the impact
The equity of a tax system concerns whether the tax burden is distributed equally among the population
a. True b. False Indicate whether the statement is true or false
Suppose that the demand for digital cameras is elastic, and the supply of digital cameras is inelastic. A tax of $20 per camera levied on digital cameras will decrease the effective price received by sellers of digital cameras by
a. less than $10. b. $10. c. between $10 and $20. d. $20.