If the actual price level is lower than the expected price level reflected in long-term contracts,
a. the actual rate of unemployment will be less than the natural rate of unemployment.
b. the actual rate of unemployment will exceed the natural rate of unemployment.
c. the natural rate of unemployment will rise.
d. the natural rate of unemployment will fall.
B
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How does the concept of utility of wealth capture the idea that pain of loss exceeds the pleasure of gain?
What will be an ideal response?
When competing firms have a commitment strategy, it is called:
A. collusion. B. competitive cooperation. C. predatory pricing. D. competition.
If the supply of loanable funds curve shifts right, then the equilibrium
a. interest rate and level of net capital outflows rise. b. interest rate rises and the equilibrium level of net capital outflow falls. c. interest rate falls and the equilibrium level of net capital outflow rises. d. interest rate and level of net capital outflows fall.
Suppose that a consumer who spends her budget on X and Y is initially at equilibrium. If the price of X increases, then the MU/P of X will:
A. Decrease and the consumer will respond by buying more Y and less X B. Decrease and the consumer will respond by buying more X and less Y C. Increase and the consumer will respond by buying more Y and less X D. Increase and the consumer will respond by buying more X and less Y