In the above figure, suppose the economy is initially at a short-run equilibrium at point D and there is an unanticipated increase in the money supply. Which point represents the new short-run equilibrium?
A. A
B. B
C. C
D. D
Answer: C
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What role does a company like J.D. Power (which provides product satisfaction reviews) serve?
A) It provides a screening test. B) It provides a signal of quality. C) It reduces moral hazard. D) It reduces costs of giving surveys.
The real balances effect predicts that higher prices:
A. make people worse off by reducing the value of their wealth, leading them to save more and spend less. B. make people worse off by reducing the value of their wealth, leading them to save less and spend more. C. make people better off by increasing the value of their wealth, leading them to save less and spend more. D. increase borrowing, leading to higher interest rates and less investment.
Unemployment rates were much higher in the 1980s than they were in the 1950s basically because
A) a higher percentage of the population was in the labor force in the 1980s, but the cost to many of them of being unemployed was much lower than it was in the 1950s. B) automation has eliminated many unskilled jobs. C) fewer jobs are available in the 1980s relative to the population. D) inflation raises unemployment rates. E) recessions have become much more severe since the 1950s.
How can technology help mitigate the effects of climate change?
What will be an ideal response?