Based on the expectations-augmented Phillips curve, if the natural rate of unemployment is 0.06, and if the actual inflation rate exceeds the expected inflation rate, then the unemployment rate is
A. 0.06 plus 0.5 times the difference between actual and expected inflation.
B. less than 0.06.
C. 0.06.
D. more than 0.06.
Answer: B
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If Jeff's wage rate rises, he decides to work more hours. From this, we can infer that
A) for Jeff, the substitution effect is greater than the income effect. B) for Jeff, the substitution effect is equal to the income effect. C) for Jeff, the substitution effect is less than the income effect. D) Jeff is confused.
If a firm increases production, then its:
A. variable costs rise. B. fixed costs stay the same. C. total costs increase. D. All of these are true.
Surpluses cause prices to fall while shortages cause prices to rise
a. True b. False Indicate whether the statement is true or false
If the U.S. dollar appreciates relative to the British pound, then we pay fewer dollars for a pound
a. True b. False Indicate whether the statement is true or false