If a central bank reduced inflation by 3 percentage points and in the short run this made output fall by 3 percentage points for 3 years and the unemployment rate rise from 3 percent to 9 percent for three years, the sacrifice ratio is
a. 1.
b. 2.
c. 3.
d. None of the above is correct.
c
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In the long run, a monopolistic competitive firm will operate at a price which:
a. is higher than minimum long-run average cost. b. equals minimum long-run average cost. c. equals marginal cost. d. none of these.
According to the theory of efficiency wages, firms operate more efficiently if wages are below the equilibrium level
a. True b. False Indicate whether the statement is true or false
A tax on primary resource use would
a. Increase recycling rates and raise the costs of some products b. Increase recycling rates and not affect product costs c. Decrease recycling rates and raise the cost of some products d. Decrease recycling rates and not affect product costs e. Decrease recycling rates but the effect on prices is unknown
The figure below illustrates the market for British pounds. D£ and S£ are the nonofficial demand and supply curves of the British pounds, respectively.
If the U.S. Federal Reserve uses a contractionary monetary policy to raise U.S. interest rates, the ________ curve would shift right and the pound would tend to
A. S£; appreciate. B. S£; depreciate. C. D£ curve and S£; appreciate. D. D£; depreciate.