Suppose the unemployment rate in 2001 was 4.7, lower than the 5.4 percent unemployment rate that policymakers think is consistent with price level stability. Accepting the dictates of the Phillips curve, they would probably forecast for 2002
a. a higher rate of inflation
b. a lower rate of inflation
c. a higher rate of GDP growth
d. a recession
e. an economic stabilization at 4.7 percent unemployment
A
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A nation can produce two products: steel and wheat. The table below is the nation's production possibilities schedule:Production Possibilities ScheduleProductABCDEFSteel012345Wheat100907555300If the nation uses all of its resources to produce only wheat, then its production combination will be
A. A. B. B. C. F. D. E.
Consider the case of complementary goods. An increase in the demand for peanut butter can be caused by a(n)
a. decrease in consumer income b. increase in the price of jams, jellies, and preserves c. decrease in the price of bread d. drought in Georgia that destroyed 30 percent of the peanut crop e. decrease in the price of bologna
A monopolist’s cost curves will
A. be identical to those of a competitive firm. B. be higher than a competitive firm’s cost curves. C. be peculiar to the individual producer since there is only one. D. drop more steeply as output increases.
Suppose we were analyzing the pound per Swiss franc foreign exchange market. If there is the expectation that the Swiss franc will rise in value in the near future, then in the spot market:
a. The supply of Swiss francs in the foreign exchange market falls, and the demand for Swiss francs in the foreign exchange market falls, causing an uncertain change in the value of the Swiss franc. b. The supply of Swiss francs in the foreign exchange market falls, and the demand for Swiss francs in the foreign exchange market rises, causing an appreciation of the Swiss franc. c. The supply of Swiss francs in the foreign exchange market rises, and the demand for Swiss francs in the foreign exchange market rises, causing an uncertain change in the value of the Swiss franc. d. The supply of Swiss francs in the foreign exchange market rises, and the demand for Swiss francs in the foreign exchange market falls, causing a depreciation of the Swiss franc. e. Neither supply nor demand in the foreign exchange market change because relative international prices influence trade flows and not the exchange rate.