The Phillips curve shows the relationship between unemployment and inflation
a. True
b. False
Indicate whether the statement is true or false
True
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
In the long run, a firm in a monopolistically competitive industry has its price equal to its
A) average total cost. B) marginal cost. C) marginal revenue. D) elasticity of demand.
Import quotas and tariffs make domestic sellers better off and domestic buyers worse off
a. True b. False Indicate whether the statement is true or false
If the economy in the graph shown were at point B, and the government wished to bring the economy back to its long-run equilibrium, it might:
A. increase income tax. B. decrease tax credits. C. increase government spending. D. All of these would move the economy to its potential GDP from point B.