Under the adaptive expectations hypothesis, which of the following is the effect of a shift to a more expansionary monetary policy?
a. In the short run, the real rate of output will be unaffected, but in the long run, it will increase.
b. In the short run, the real rate of output will increase, but in the long run, it will be unchanged.
c. There will be a permanent increase in the real rate of output, but the inflation rate will also be a little higher.
d. In the short run, the impact on the real rate of output is uncertain, but in the long run, output will increase.
B
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When China embarked on market changes towards urbanization and manufacturing in 1978, urban disposable incomes were 2.6 times greater than rural net income. By 2008 they were 3.3 times bigger. These market changes have led to
A) increased income inequality between rural and urban populations. B) a decreased Gini ratio. C) the Lorenz curve for income to move closer to the line of equality. D) a movement towards a bell-shaped distribution of income.
The type of unemployment caused by changes in the business cycle is
a. cyclical unemployment. b. natural unemployment. c. frictional unemployment. d. structural unemployment.
Two goods are complements when a decrease in the price of one good
a. decreases the quantity demanded of the other good. b. decreases the demand for the other good. c. increases the quantity demanded of the other good. d. increases the demand for the other good.
Ways to ration goods include
A) first-come, first-served. B) political power. C) prices. D) all of the above.