In the long run,

A) unemployment is at its natural rate. B) GDP > potential GDP.
C) LRAS and SRAS lie on the same line. D) the inflation rate is zero.


A

Economics

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Mikkelson Corporation's stock had a required return of 11.75% last year, when the risk-free rate was 5.50% and the market risk premium was 4.75%. Then an increase in investor risk aversion caused the market risk premium to rise by 2%. The risk-free rate and the firm's beta remain unchanged. What is the company's new required rate of return? (Hint: First calculate the beta, then find the required return.)

a.14.38% b.14.74% c.15.11% d.15.49%e.15.87%

Economics

Mitchell's money income is $150, the price of X is $2, and the price of Y is $2. Given these prices and income, Mitchell buys 50 units of X and 25 units of Y. Call this combination of X and Y bundle J. At bundle J, Mitchell's MRS is 2. At bundle J, if Mitchell increases consumption of Y by 1 unit, how many units of X can he give up and still reach the same level of utility?

A. 4 B. ½ C. 1 D. 2

Economics

The firm's most efficient output would be


A. 70 units.
B. 80 units.
C. 90 units.
D. 100 units.

Economics

Using the above figure, which of the following is CORRECT?

A) 1 guilder will sell for $2. B) 1 dollar will sell for 1/2 guilder. C) A shortage of guilders exists at an exchange rate above $0.60. D) A surplus of guilders exists at an exchange rate above $0.60.

Economics