If the sacrifice ratio is 2, reducing the inflation rate from 4 percent to 2 percent would
a. cost 1 percent of annual output.
b. cost 4 percent of annual output.
c. imply that unemployment would rise by 1%.
d. imply that unemployment would rise by 4%.
b
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By a leading economic indicator, economists mean:
a. an indicator of future economic activity b. an indicator that reflects economic fluctuations as they occur. c. a highly accurate indicator that is easily measured. d. an indicator that predicts the level of inflation in an economy. e. any variable that follows changes in economic activity.
The market allocates goods to individuals according to the individuals'
a. desire for the good. b. ability to pay for the good. c. desire and ability to pay for the good. d. political influence.
An increase in the value of the U.S. dollar in world markets, other things constant, would increase the demand for U.S. exports.
a. true b. false
In contrast to American firms, Japanese firms frequently make lifetime employment commitments to their workers and agree not to lay them off when product demand is weak. Other things being equal, we would expect Japanese firms to:
A. face more elastic product demand curves than American firms. B. have relatively greater variable costs than American firms. C. discontinue production at higher product prices than would American firms. D. continue to produce in the short run at lower prices than would American firms.