According to the accelerationist Phillips curve, ________
A) expectations adjust continually to the latest information
B) increases in inflation cause the unemployment gap to widen
C) inflation will change so long as an unemployment gap persists
D) all of the above
E) none of the above
C
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The quantity theory of money asserts that an increase in the quantity of money
A) will decrease the price level by an offsetting amount. B) by n percent will lead to an increase in the price level by n + 1 percent. C) will lead to an equal percentage increase in real GDP. D) will lead to an equal percentage increase in the price level.
Refer to Figure 3-6. The figure above represents the market for canvas tote bags. Assume that the price of tote bags is $15. At this price
A) there is a shortage equal to 55 tote bags; the price of tote bags will rise until demand is equal to supply. B) the demand exceeds the supply of tote bags by 55. Some consumers will have an incentive to offer to buy tote bags at a higher price. C) the quantity demanded exceeds the quantity supplied by 75. The price will eventually rise to $25 where quantity demanded will equal quantity supplied. D) there is a shortage, equal to 55 tote bags, that will be eliminated when the price rises to $25.
If a firm uses introductory pricing, it is likely ________ short run profit and ________ long run profit
A) minimizing; maximizing B) maximizing; maximizing C) maximizing; reducing D) reducing; maximizing
Demand-pull inflation is most pronounced during a recession (as opposed to the recovery phase of the business cycle)
a. True b. False Indicate whether the statement is true or false