A supply shock that reduces labor productivity
A) causes accelerating inflation if the Fed attempts to maintain the original output level.
B) will increase real wages if nominal wages are flexible.
C) will reduce the level of output at the natural level of real GDP even if employment does not decline.
D) A and C.
D
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According to supply-side theory, if one starts from a balanced budget, a cut in taxes will tend to cause ________
A) a budget deficit B) no change in the federal government budget C) a decrease in aggregate supply and an increase in aggregate demand D) a budget surplus
Which of the following is a variable in the equation of exchange?
A. the price level. B. the money supply. C. all of these D. real Gross Domestic Product (GDP).
The concept of the invisible hand was first introduced to economics by:
A. Adam Smith. B. Thomas Malthus. C. Milton Friedman. D. David Ricardo.
Collusion:
A) is necessary to achieve an outcome better than a Nash equilibrium. B) is legal in the United States. C) always results in a Nash equilibrium. D) eliminates cheating.