Using Figure 1 above, if the aggregate demand curve shifts from AD1 to AD2 the result in the short run would be:
A. P1 and Y2.
B. P3 and Y1.
C. P2 and Y2.
D. P2 and Y3.
Answer: D
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Firms will hire additional workers as long as the wage:
A. is greater than the marginal product of labor. B. is less than the value of the marginal product of labor. C. equals the marginal product of labor. D. is less than the marginal product of labor.
An increase in the expected inflation rate
A) leads to a movement downward along the short-run Phillips curve. B) shifts the short-run Phillips curve downward. C) shifts the long-run Phillips curve upward. D) shifts the short-run Phillips curve upward. E) leads to a movement upward along the short-run Phillips curve.
Over a month in late 2008, the Federal Reserve Bank reduced the interest rate by 1 percentage point
Given that the United States operates under a ________ exchange rate regimes, the primary purpose of these changes was ________ exchange rate of each currency. A) flexible; not designed to influence B) flexible; designed to influence C) fixed; designed to influence D) fixed; not designed to influence
Which of the following cause the unemployment rate as measured by the Bureau of Labor Statistics to understate the true extent of joblessness?
A) inflation B) unemployed persons falsely report themselves to be actively looking for a job C) discouraged workers D) people employed in the underground economy