The current account shows transactions in goods and services; the capital account shows purchases and sales of assets; and the official reserve transactions account shows movement of international reserves
a. True
b. False
A
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Price ceilings set below the equilibrium create:
a. externalities. b. unemployment. c. shortages. d. surpluses.
If a firm's expected marginal product of capital exceeds its tax-adjusted user cost of capital, the firm will
A. not change its investment spending on capital goods. B. increase its investment spending on capital goods. C. reduce its investment spending on capital goods. D. increase the tax-adjusted user cost of capital.
The collection and use of data to test economic theories is
A. empirical economics. B. descriptive economics. C. positive economics. D. normative economics.
If the unemployment rate in the economy is steady at 4 percent per year, how does the short-run Phillips curve predict that the inflation rate will be changing, if at all? What will happen if the unemployment rate now rises to 7 percent per year?
Assume there are no changes to inflation expectations. Provide an appropriate graph to support your discussion.