According to the rational expectations school,
a. the Phillips curve is upward sloping in the short run and downward sloping in the long run
b. both for the short and long runs, the Phillips curve is horizontal
c. both for the short and long runs, the Phillips curve is vertical
d. there is no Phillips curve
e. Keynesians assume irrational expectations behavior on the part of firms and individuals that allows them, erroneously, to conclude that there are no trade-offsbetween inflation and unemployment
C
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Suppose the consumer's indifference curves are concave (i.e., bowed away from the origin) instead of convex. In this situation,
a. along an indifference curve, the marginal value of X is falling as more X and less Y is consumed. b. all baskets on the budget line give the consumer the same level of satisfaction. c. the marginal value of X must equal PX/PY at the consumer's optimum. d. the consumer's optimum is always a corner solution.
The largest rent subsidy program provides what is called ______
a. Section 6 housing. b. Section 8 housing. c. public housing d. AFCD housing
Economists can illustrate an uneven distribution of income by sketching a Lorenz curve that lies above the diagonal
a. True b. False Indicate whether the statement is true or false
A citizen in a developing country with a currency policy of convertibility on the current account could engage in all of the following transactions except:
A. sell foreign currency resulting from the exports of manufactured t-shirts. B. sell foreign currency resulting from the sale of a U.S. treasury bond. C. purchase foreign currency in order to import a BMW. D. purchase foreign currency in order to purchase a U.S. treasury bond.