Why is price inflation sometimes good in a recession?
A. Price inflation makes it harder for real wages to fall.
B. Price inflation makes it harder for real wages to rise.
C. Price inflation makes it easier for real wages to rise.
D. Price inflation makes it easier for real wages to fall.
Answer: D. Price inflation makes it easier for real wages to fall.
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What does the slope of the curved line at point A shown in the above figure equal?
What will be an ideal response?
Quotas and tariffs both
A) decrease deadweight loss. B) restrict foreign trade. C) cause a loss of revenue to domestic producers. D) lower prices on imported goods.
The original (1958 ) Phillips curve stated that
A) unemployment and money wage rates move in the same direction. B) unemployment and money wage rates move in opposite directions. C) there is an inverse relationship between price inflation and unemployment D) there is a direct relationship between price inflation and unemployment. E) a and c
If excess reserves in the banking system are $4,000, checkable deposits are $40,000, and the legal reserve ratio is 10 percent, then actual reserves are:
A. $6,000. B. $8,000. C. $5,000. D. $4,000.