When the reservation wage is adjusted to account for a higher inflation rate:
a. the aggregate demand curve shifts to the right.
b. the price level falls.
c. the short-run Phillips curve shifts outward.
d. production costs of businesses decline.
e. the aggregate supply curve shifts to the right.
c
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When considering the demand for money, which two assets do we assume individuals can hold?
a. Stocks and bonds b. Money and stocks c. Money and bonds d. Checking accounts and savings accounts e. Money and real estate
Which of the following about public goods is true?
a. Consumption of a public good by one individual reduces the availability of the good for others. b. It is extremely difficult to limit the benefits of a public good to only the people who pay for it. c. Public goods are free to a society when they are produced by the government. d. From an efficiency standpoint, a market will generally supply too much of a public good.
According to the text, what is the major long-run issue facing the European Union?
What will be an ideal response?
If the economy is in long-run equilibrium:
A. current inflation should be less than expected inflation. B. current inflation should equal expected inflation. C. inflation should be accelerating. D. current output should be greater than potential output.