If workers and firms forecast inflation accurately,
a. the aggregate supply curve will be vertical.
b. the real wage will not decline as the price level rises.
c. workers will not lose from inflation, and firms will not gain.
d. All of the above are correct.
d
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The North American Free Trade Agreement affects trade between:
a. the United States, Cuba, and Brazil. b. the United States, Canada, and Mexico. c. the United States, Puerto Rico, and Cuba. d. Brazil, Bolivia, Peru, and Columbia. e. China and the United States.
Identify the variables that could cause shifts in both the short-run and long-run aggregate-supply curves
A 10 percent rise in the price of housing reduces the quantity demanded of housing by 3 percent. We can conclude that the demand for housing is:
A. inelastic. B. elastic. C. unitary elastic. D. perfectly elastic.
The policy irrelevance proposition implies that
A. unanticipated monetary policy actions are equally effective in stimulating both aggregate demand and aggregate supply. B. anticipated monetary policy actions are ineffective in generating changes in real Gross Domestic Product (GDP). C. anticipated monetary policy actions are effective in stimulating aggregate supply, but they are not effective in stimulating aggregate demand. D. anticipated monetary policy actions are effective in increasing real Gross Domestic Product (GDP), but they do not reduce unemployment.