The long-run policy prescription that comes from the "natural-rate-of-unemployment" discussion is:
a. Governments and central banks should adjust monetary and fiscal policies to keep unemployment and inflation as low and predictable as possible.
b. Governments and central banks should use monetary and fiscal policies to keep inflation as low and predictable as possible.
c. Real wages should not be allowed to change in the short run.
d. Fiscal and monetary policies are excellent ways to adjust the natural rate of unemployment.
e. Governments and central banks should use monetary and fiscal policies to keep unemployment as low and predictable as possible.
.B
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Answer the next question(s) based on the following information for Manfred's Shoe Shine Parlor.Units of LaborTotal ProductMarginal ProductTotal Revenue00 11414$422 10 330 90435 539 1176 1267442132Assume Manfred hires labor, its only variable input, under purely competitive conditions. Shoe shines are also sold competitively. At what price does each shoe shine sell?
A. $1 B. $3 C. $2.50 D. $2
Don's Taxicab Service is the only taxi company operating in a large city. In the beginning, Don took over the local taxi market by buying out his competition. Now he sets his own rates as a privately-owned monopoly, but residents and tourists are upset by the very high prices. If there are no economies of scale in taxicab service, then the best solution is most likely
a. to encourage concentration by constructing barriers to entry b. laissez-faire since the market is clearly contestable c. antitrust action to break up Don's into a number of firms d. price regulation by a city commission e. for the city to take over and operate Don's Taxicab
The economy is in the horizontal portion of the AS curve, investment spending is interest insensitive and there is no liquidity trap. According to the Keynesian transmission mechanism, if the money supply increases the interest rate will __________, investment spending will __________, the AD curve will __________, and Real GDP will __________
A) fall; fall; left; fall B) rise; drop; left; fall C) fall; remain unchanged; not shift; not change D) rise; remain unchanged; not shift; not change E) none of the above
If real GDP grows at 3% and population grows at 1.2%, then real GDP per capita grows by 4.2%.
a. true b. false