Lower inflation rates are usually correlated with lower unemployment rates
a. True
b. False
Indicate whether the statement is true or false
False
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One reason a country might choose a fixed exchange rate is
A) to reduce inflation and promote a stable economic environment. B) to reduce the impact of economic shocks. C) to rid themselves of the pressure of monetary management. D) that it is easier for all citizens to understand.
Under the kinked demand curve model, a small increase in marginal cost will lead to
A) an increase in output level and a decrease in price. B) a decrease in output level and an increase in price. C) a decrease in output level and no change in price. D) neither a change in output level nor a change in price.
The ultimate result of the multiplier-accelerator interaction is a(n)
a. lengthy period of economic growth and prosperity similar to the one experienced in the 1990s b. prosperity at an annual growth rate of about three percent, which is the rate of growth of full employment GDP c. noninterventionist government countercyclical fiscal policy d. need for the economy's rate of growth to grow or at least remain constant otherwise a positive but slower growth rate can spark an economy's downturn e. need for the economy to maintain its current level of consumption to justify the increased level of capital stock
The less the bend (or arc), or more linear the utility function is, the ________ risk averse the person is.
Fill in the blank(s) with the appropriate word(s).