Which of the following situations generally exists when deflation occurs?
A) Inflation and unemployment are both increasing.
B) Inflation and unemployment are both decreasing.
C) The price level is decreasing.
D) The rate of inflation is falling from, for example, 10% to 3%.
E) The natural rate of unemployment is zero.
C
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Refer to Scenario 5.6. If the doctor is risk-averse, she would accept
A) $50,000 for sure rather than take the risk of being a researcher. B) $60,000 for sure (the minimum HMO outcome) rather than take the risk of being a researcher. C) $95,000 for sure rather than face option 1 and option 2 in research. D) $275,000 for sure (the average of option 1 and option 2 in research), but not less, rather than face the risk of those two options. E) the research position because it has the highest possible income.
Suppose that in a certain nation the flat income tax rate of 40 percent is reduced to 35 percent and as a result the tax base falls from $400 billion to $375 billion. As a result, tax revenues __________, indicating the nation is on the __________ portion of its Laffer curve
A) rise; upward-sloping B) rise; downward-sloping C) fall; upward-sloping D) fall; downward-sloping
Which of the following is a characteristic of economic rent?
A. It can never be negative. B. It equals economic profit minus accounting profit. C. It is driven towards zero by free entry. D. It can be positive, zero, or negative.
Are there impediments to international movement of labor and capital?
A. Yes, but they apply to labor only; capital mobility is almost completely free. B. Yes, although these apply to capital, and not to labor. C. Yes, there are significant (often prohibitive) restrictions on labor and capital mobility. D. No, these have been removed with the passage of recent trade legislation.