How is a decrease in the natural rate of unemployment shown in the Phillips curve diagram? Does this decrease change the inflation rate?
Both the long-run and the short-run Phillips curves shift left. There is no change in the inflation rate.
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Limit pricing is used primarily to:
A) discourage new firms from entering a market. B) reduce (limit) the profits of all of the firms in the industry. C) drive other firms out of a market. D) establish a minimum price all of the firms in the market will charge.
The efficient markets hypothesis predicts that stock prices follow a "random walk." The implication of this hypothesis for investing in stocks is
A) a "churning strategy" of buying and selling often to catch market swings. B) turning over your stock portfolio each month, selecting stocks by throwing darts at the stock page. C) a "buy and hold strategy" of holding stocks to avoid brokerage commissions. D) following the advice of technical analysts.
If a pair-wise majority vote was held and the voters' preferences are shown in the table, which option would win overall?
A. Public transportation
B. Public zoo
C. Public parks
D. It is impossible to predict which option would win.
If the monetary base is directly controlled by the Federal Reserve, the supply of overnight money is
A. downward sloping. B. vertical. C. flat. D. upward sloping.