If labor markets were perfectly efficient, the unemployment rate would fall to zero.
Answer the following statement true (T) or false (F)
False
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A change in the level of the supply of money
A) increases the long-run values of the interest rate and real output. B) decreases the long-run values of the interest rate and real output. C) has no effect on the long-run values of the interest rate, but may affect real output. D) has no effect on the long-run values of real output, but may affect the interest rate. E) has no effect on the long-run values of the interest rate and real output.
A ray through the origin always has a slope of one.
Answer the following statement true (T) or false (F)
(Consider This) Suppose that a new band, "Balin and the Wolf Riders," tries to sell its music on the internet. Economists would expect:
A. all of those enjoying the music to pay for downloads and compensate the band for its costs. B. some of those enjoying the music to "free ride" through illegal file sharing and digital piracy. C. government to tax those attempting to download the band's music. D. there to be no consumer surplus for those who download the band's music.
If the actual inflation rate is equal to the expected rate, which of the following will happen?
a. inflationary expectations will increase and the Phillips curve will shift downward in the short run. b. inflationary expectations will not change and the Phillips curve will remain in its current position in the short run. c. inflationary expectations will decrease and the Phillips curve will shift downward in the short run. d. inflationary expectations will stay constant and the Phillips curve will shift downward in the short run. e. inflationary expectations will not change and the Phillips curve will become horizontal in the short run.