To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change.
B. increase.
C. decrease.
D. either increase or decrease depending on the relative shifts of AD and AS.
Answer: C
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A monopolist hiring labor in a perfectly competitive resource market is faced with a:
a. perfectly elastic demand curve for labor. b. horizontal marginal factor cost curve. c. perfectly inelastic demand curve for labor. d. vertical supply curve of labor. e. positively sloped marginal factor cost curve.
The primary cause of frictional unemployment is
a. the low level of the current minimum wages. b. the lack of and cost of acquiring information about available job opportunities. c. a mismatch of the skills of unemployed workers with the skills needed for job openings. d. discouraged workers who quit looking for a job after extended periods of unsuccessful job search.
Fumiyo deposits $90,000 into Blue Flag Bank and Lyle deposits $75,000. Blue Flag Bank’s required reserve ratio is 11 percent. How much of these two deposits can the bank lend to borrowers?
a. $146,850 b. $18,150 c. $15,375 d. $150,000
An increase in a nation's financial liabilities to foreign residents is a
A. capital imports. B. capital outflow. C. reserve inflow. D. reserve outflow.