In the figure below, draw a short-run Phillips curve and a long-run Phillips curve if the expected inflation rate is 4 percent and the natural unemployment rate is 6 percent
Explain how the two change in the short run if:
a. slower growth in aggregate demand causes a recession.
b. the inflation rate increases.
c. the natural unemployment rate increases.
The figure with the Phillips curves is above.
a. There is a downward movement along the short-run Phillips curve.
b. There is an upward movement along the short-run Phillips curve.
c. There is a rightward shift of both the long-run and short-run Phillips curves.
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Suppose the Fed wants to fix the U.S. dollar/Mexican peso rate at 11 pesos per dollar under a fixed exchange rate policy. If the exchange rate falls to 10 pesos per dollar, the Fed can
A) buy dollars. B) sell dollars. C) attempt to freeze all sales of dollars. D) any of the above actions could take place.
In the figure above, the Lorenz curve that shows the richest 20 percent of households receiving 40 percent of all income is
A) curve A. B) curve B. C) curve C. D) curve D.
The Paradox of Value is resolved by the willingness for an individual to pay a high price for a good or service that has a high marginal utility per dollar
Indicate whether the statement is true or false
The table above shows the marginal costs and marginal benefits of college education. If the market for college education is perfectly competitive and unregulated, the amount of enrollment is
A) efficient. B) inefficient because marginal social cost exceeds marginal social benefit. C) inefficient because marginal social benefit exceeds marginal social cost. D) inefficient because the quantity of education demanded exceeds the quantity of education supplied.