When the unemployment rate is below the natural rate,
a) wages and prices will begin to rise and employment will fall
b) real wages will fall and employment will increase
c) prices will fall, and unemployment will rise
d) the natural rate will increase to restore equilibrium
e) the unemployment rate will rise, but neither prices not wages will change
a) wages and prices will begin to rise and employment will fall
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The real discount rate and the nominal discount rate differ in their treatment of
A) risk. . B) market return. C) inflation. D) expected risk.
Most economists have argued that the persistence of high unemployment despite New Deal policies:
a. constitutes a complete repudiation of New Deal policies. b. was the result of "sticky" wages. c. was in part the result of pressures from government to maintain wages. d. Both b and c are correct.
A price ceiling imposed on a good that is below the equilibrium price will result in a shortage of that good
a. True b. False Indicate whether the statement is true or false
A good way to start every Three-Sector-Model analysis is to:
a. Describe what is happening in the foreign exchange market and then proceed to explain what happens in the other two markets simultaneously. b. Identify the economic effects that result from an economic change and then work your way backward to identify the most important part of the analysis, which is the economic shock that started it all. c. Analyze the chain reaction of economic interactions. d. Gather basic information about the three markets and describe qualitatively the economic setting in each market.