If business cycles are caused by changes in aggregate supply, you would expect to see
a. prices and unemployment moving in the same direction.
b. price and unemployment moving in opposite directions.
c. prices not moving with unemployment.
d. unemployment is not included in the Keynesian model.
A
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If the realized real interest rate in an economy is 6%, the realized inflation rate is 8%, and the expected inflation rate is 8%, then the nominal interest rate in the economy is:
A) 2%. B) 8%. C) 20%. D) 14%.
The size of changes in output and price level, and how the change in equilibrium relates to potential GDP, depends on whether the shift in the _____ curve is happening in the relatively flat or relatively steep portion of the _____ curve.
a. AD; AD b. AS; AS c. AD; AS d. AS; AD
If Ferdinand prefers a Big Mac to a Whopper and a Whopper to a hotdog, but is indifferent between a Big Mac and a Quarter Pounder he must
A. prefer a Quarter Pounder to a hotdog. B. prefer a Whopper to a Quarter Pounder. C. be indifferent between a Whopper and a hotdog. D. be indifferent between a Quarter Pounder and a Whopper.
The Lorenz curve portrays:
A. the functional distribution of income. B. the ratio of labor to capitalist income. C. the personal distribution of income. D. income equality.