Which of the following is part of the modern view of the Phillips curve?
a. When inflation exceeds what was anticipated, unemployment falls below the natural rate.
b. When inflation is less than anticipated, unemployment will rise above the natural rate.
c. Demand stimulus policies can temporarily reduce unemployment, but in the long run, their primary impact will be on prices (inflation).
d. All of the above are correct.
D
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If penalties are imposed only on the buyers of illegal drugs, the equilibrium price of illegal drugs will ________ and the equilibrium quantity will ________
A) rise; increase B) rise; decrease C) fall; increase D) fall; decrease
A large aircraft manufacturer, like Boeing, may have a cost advantage over a new smaller manufacturer because of:
a. diseconomies of scale. b. economies of scale. c. diminishing returns to a fixed factor of production. d. the principal agent problem is generally less severe for larger firms.
In a barter economy that had no form of currency, how could interest exist?
You and your college roommate eat three packages of Ramen noodles each week. After graduation last month, both of you were hired at several times your college income. You still enjoy Ramen noodles very much and buy even more, but your roommate plans to buy fewer Ramen noodles in favor of foods she prefers more. When looking at income elasticity of demand for Ramen noodles,
a. yours would be negative and your roommate's would be positive. b. yours would be positive and your roommate's would be negative. c. yours would be zero and your roommate's would approach infinity. d. yours would approach infinity and your roommate's would be zero.