According to the political business cycle, after an election, unless the central bank acts inflation is likely to
a. have risen. To counter this the central bank would raise interest rates.
b. have risen. To counter this the central bank would lower interest rates.
c. have fallen. To counter this the central bank would raise interest rates.
d. have fallen. To counter this the central bank would lower interest rates.
a
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All else constant, a cartel agreement will become more difficult to enforce as the number of firms competing the market increases and the members of the cartel produce a differentiated product
Indicate whether the statement is true or false
The major goal of social regulation is
A) a better quality of life through a less polluted environment, better working conditions, and safer and better products. B) to make sure that firms are not earning monopoly profits. C) to make sure that prices are kept low enough so that every person can purchase the good. D) to make sure that the firm produces at the socially optimal point of production.
To eliminate an AD shortfall of $100 billion when the economy has an MPC of 0.50, the government should increase spending by
A. $50 billion. B. $500 billion. C. $100 billion. D. $200 billion.
Which of the following statements about unemployment that is indicative of sectoral shifts hypothesis is not correct?
A. Unemployment spells will be longer the more firm-specific and industry-specific skills are. B. When an industry experiences a negative shock, those workers who become unemployed will eventually become employed in new industries after they adjust their skills to match the needs of new, growing industries. C. Unemployment rates for sectoral shifts reasons will vary by industry and occupation. D. When an industry experiences a negative shock, those workers who become unemployed will eventually become employed in new industries when the new industries adjust their needs to the existing skills of the unemployed. E. All of these are indicative of the sectoral shifts hypothesis.