When the Phillips curve was first formulated (late 1960s), many economists thought that it showed a
A. “menu” of budget deficits from different budget policies.
B. “menu” of possible choices available to policymakers.
C. guide to the appropriate mix of fiscal and monetary policy.
D. guide of political reactions to economic policy.
Answer: B
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If a society produces at a point on the production possibilities frontier, this is consistent with the full employment of resources.
Answer the following statement true (T) or false (F)
The amount of the external marginal cost per ton illustrated in the above figure is
A) $8.00 per ton. B) $12.00 per ton. C) $16.00 per ton. D) zero because no external cost is illustrated.
When a negative externality exists, _______________________ and thus _______________ intervention may be needed to achieve efficiency.
A. external costs are necessarily greater than private costs; government B. social costs equal private costs; no government C. social costs are less than private costs; government D. social costs are greater than private costs; government E. none of the above
Frictional unemployment explains why unemployment rises during a recession and falls during an economic expansion.
Select whether the statement is true or false. A. True B. False