The long-run Phillips curve is consistent with monetary neutrality implied by the classical dichotomy
a. True
b. False
Indicate whether the statement is true or false
True
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If firms in a perfectly competitive industry are earning an economic profit, then in the ________, firms will ________ the industry
A) short run; enter B) long run; enter C) short run; exit D) long run; exit E) More information about the firms' costs and the price of the product is needed to determine if firms enter or exit the industry.
Monopolistically competitive industries have significant barriers to entry and exit
a. True b. False Indicate whether the statement is true or false
A positive supply shock causes a leftward shift in the SRAS curve
a. True b. False Indicate whether the statement is true or false
Assume that the central bank lowers the discount to increase the nation's monetary base. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and GDP Price Index in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium. a. The real
risk-free interest rate falls and GDP Price Index falls. b. The real risk-free interest rate rises and GDP Price Index falls. c. The real risk-free interest rate and GDP Price Index remain the same. d. The real risk-free interest rate falls and GDP Price Index rises. e. There is not enough information to determine what happens to these two macroeconomic variables.