Milton Friedman and Edmund Phelps argued in the late 1960s that in the long run the Phillips curve is
a. downward-sloping, which implies that monetary and fiscal policies can influence the level of unemployment in the long run.
b. downward-sloping, which implies that monetary and fiscal policies cannot influence the rate of inflation in the long run.
c. vertical, which implies that monetary and fiscal policies cannot influence the level of unemployment in the long run.
d. vertical, which implies that monetary and fiscal policies cannot influence the rate of inflation in the long run.
c
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Suppose that each of 8,000 firms in a perfectly competitive industry produces 1,000 units of a good and maximizes profits when the price of the good is $10
If there is a permanent increase in demand, in the short run each firm produces ________ 1,000 units and in the long run the number of firms is ________ 8,000. A) more than; more than B) less than; more than C) less than; less than D) more than; less than E) exactly; more than
Brian Vargo, an auto repair mechanic who remains unemployed because he refuses to work for less than $1,000 an hour, is
a. counted as part of the labor force and is unemployed b. considered frictionally unemployed c. an underemployed worker d. not counted as part of the labor force e. considered productively active even though he isn't working
Monetarism resembles Keynesian thinking in that they both
a. emphasize supply and ignore demand. b. integrate supply-side analysis into their models. c. emphasize demand side effects. d. emphasize the importance of fiscal policy.
Which of the following is true?
a. Marginal tax rates that take a large share of income will enhance the incentive of individuals to invest and engage in productive activities. b. High tax rates will tend to drive investment funds and highly productive citizens to other countries where tax rates are lower. c. As marginal tax rates increase, individuals get to keep a larger share of their earnings. d. Countries can gain by imposing higher tariffs and other barriers that will restrain international trade.