If the Bank of Japan permanently increases its money supply, then which of the following is most likely to take place in the short run?
a. Japanese prices will immediately decrease.
b. Japanese prices will immediately increase.
c. Japanese interest rates will increase.
d. Japanese interest rates will decrease.
Ans: d. Japanese interest rates will decrease.
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Mergers often increase profit by
A) producing economies of scale. B) producing economies of scope. C) increasing efficiency of the firm. D) All of the above.
Which of the following factors makes the official unemployment rate an overstatement of the actual level of unemployment in the economy?
a. Inclusion of discouraged workers b. Inclusion of those only working part time c. Inclusion of those who are overqualified for their current jobs d. Inclusion of those who are marginally attached to the labor force e. Inclusion of those who pretend to look for work in order to qualify for welfare programs
If the short-run Phillips curve was a straight line with a very steep slope, the inflation costs of reducing unemployment: a. are fairly low
b. are fairly high. c. depend on the current rate of inflation. d. rises as the economy approaches full employment.
The state of Florida is considering putting an excise tax on either good X or good Y. An economist discovers the supply of good X is more elastic than the supply of good Y, while the demand elasticities are identical. Which good should Florida tax in order to minimize the deadweight loss of the tax?