When determining equilibrium using supply and demand, the concept of ceteris paribus is used. The term ceteris paribus means:
a. other things being equal.
b. allowing things to change.
c. other things being different.
d. time and space considered.
a. other things being equal.
The concept of ceteris paribus is used when determining equilibrium with supply and demand and means “other things being equal.”
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There is a
a. short-run tradeoff between inflation and unemployment. b. short-run tradeoff between an increase in the money supply and inflation. c. long-run tradeoff between inflation and unemployment. d. long-run tradeoff between an increase in the money supply and inflation.
Graphically an increase in the short-run aggregate supply line represents a(n) ________, and a shift leftward of the long-run aggregate supply line represents a(n) ________.
A. adverse inflation shock; shock to potential output B. favorable inflation shock; shock to potential output C. shock to potential output; favorable inflation shock D. shock to potential output; adverse inflation shock
Robert Shiller posed the following question to workers: "Imagine that next year the inflation rate unexpectedly doubles
How long would it probably take, in these times, before your income is increased enough so that you can afford the same things as you do today?" Shiller found that ________ percent of the workers he interviewed reported that it would take several years to restore the purchasing power of their wages or that this power would never be restored. A) 25 B) 42 C) 64 D) 81
Monetarism is a school of thought put forth by Milton Friedman. He argued that the economy would most likely
A) be unstable. B) be at potential GDP. C) be above potential GDP. D) be below potential GDP.