If inflation expectations change, a contractionary fiscal policy causes
A. the long-run Phillips curve to shift.
B. the short-run Phillips curve to shift.
C. a movement along the short-run Phillips curve.
D. the short-run Phillips curve to remain constant.
Answer: B
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If increased supply leads to lower prices, why is rapid growth of the money supply usually accompanied by high interest rates?
What will be an ideal response?
Ben is asked to rate the utility he would get from reading different types of publications for the next hour. If he read a graphic novel he would get utility of 5. If he read a biography, he would get utility of 4, and if he read his economics textbook, he would get utility of 9. An economist would predict that Ben will spend his next hour reading:
A. a graphic novel. B. a biography. C. his economics textbook. D. It is impossible to predict how Ben will spend his time.
When a firm faces a downward-sloping demand curve, marginal revenue
a. is constant regardless of how much output the firm produces b. is less than price c. increases as the firm produces more output d. decreases if the firm produces less output e. is equal to the price per unit of output
Socially inefficient outcomes are possible when
A) uninformed parties want to avoid opportunistic behavior by informed parties. B) informed parties engage in opportunistic behavior against uninformed parties. C) those in charge are risk neutral. D) workers do not own the firm.