The lack of a long-run tradeoff between the unemployment rate and the inflation rate means that
A) the natural unemployment rate cannot change.
B) only a decrease in the inflation rate would bring a reduction in the natural unemployment rate.
C) only fiscal policy is effective to lower the natural unemployment rate.
D) only monetary policy is effective to lower the natural unemployment rate.
E) an increase in the inflation rate would not bring a reduction in the natural unemployment rate.
E
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Use the figure below to answer the following question.
An increase in quantity supplied caused by a change in price is depicted by a
A. movement from point y to point x. B. shift from S1 to S2. C. movement from point x to point y. D. shift from S2 to S1.
Economic theory is sometimes referred to as marginalism or marginal analysis because
A) it deals with matters not central to most people's personal lives. B) it emphasizes the effects of additional benefits and additional costs. C) it has such a minor effect on political decisions. D) it is only useful when it is added to a large stock of other knowledge. E) it was created by abstracting from experience.
The U.S. Federal government limits the ability for private firms to harvest timber on much government land. This, it is argued, increases the amount of fuel for wildfires which often burn out of control and cost money and manpower to control
A) This suggests that the policy addressing one positive externality might have created another positive externality. B) This suggests that those who harvest timber are prone to starting wildfires. C) This suggests that the policy addressing timber harvesting created a negative externality. D) This suggests that government policy is destined to fail.
Scott used $4,000,000 from his savings account that paid an annual interest of 5% and a $60,000 loan at an annual interest rate of 5% to purchase a hardware store. After one year, Scott sold the business for $4,100,000 . His economic profits is:
a. $300,000 b. $100,000 c. $97000 d. None. He runs an economic loss of $103,000