The above figure shows the apartment market in Big City. What could the Big City Housing Authority do if it wants to reduce the rents paid by its citizens?
A) impose a rent floor above $1350
B) impose a rent floor below $1350
C) impose a rent ceiling above $1350
D) impose a rent ceiling below $1350
D
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The hypothesis that people combine the effects of past policy changes on important economic variables with their own judgment about the future effects of current and future policy changes is the basis of the
A) short-run Phillips curve hypothesis. B) rational expectations hypothesis. C) demand-pull inflation hypothesis. D) adaptive hypothesis.
Characteristics of a perfectly competitive market include:
A. the absence of transaction costs. B. differentiated products. C. few sellers, some with a large market share. D. All of these are characteristics of a perfectly competitive market.
The labor force participation rate is the
A. total number of people who are participating in the labor force. B. ratio of the labor force to the total population 16 years old or older. C. the number of people in the labor force minus the number of people who are unemployed. D. ratio of the number of employed people to the number of unemployed people.
Why do sticky wages and prices increase the impact of an economic downturn on unemployment and recession?
What will be an ideal response?