Long-run Phillips curve is a vertical line drawn at the economy's natural rate of ________
a. output level
b. unemployment
c. inflation
d. profit
b
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Which of the following tools cannot be used by the government to maintain a fixed exchange rate?
A. rationing of foreign exchange B. currency market intervention C. controlling the flow of trade through various barriers D. keeping its level of international reserves strictly fixed
List prices on new cars do not change very often, so
A) the real price of cars is very inflexible. B) the prices of new cars can only be flexible if there are changes in the cost of materials. C) price flexibility is not an important feature in the auto market. D) price flexibility shows up primarily through the negotiations between buyers and sellers.
Which term describes the situation in which a country that can consume more than it can produce as a result of specialization and trade?
a. comparative advantage b. absolute advantage c. gain from trade d. trade advantage
Firms in perfectly competitive markets typically have:
A. one profit-maximizing level of output. B. two profit-maximizing levels of output to choose from. C. several profit-maximizing levels of output to choose from. D. no chance of maximizing profits, since they have no control over market price.