Examining data on cyclical unemployment plotted against unanticipated inflation shows
A. a negative relationship.
B. a relationship only during the 1960s.
C. a positive relationship.
D. no significant relationship.
Answer: A
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In a two-nation, two-good world, if country A has the comparative advantage in producing good X over country B, then country A
A. could have the comparative advantage in producing the other good Y as well. B. must have the comparative disadvantage in producing the other good Y. C. should not trade with country B. D. can produce good X with fewer resources than country B.
If the income effect is larger than the substitution effect, then a wage hike will be accompanied by an increase in the quantity of labor supplied
Indicate whether the statement is true or false
A Phillips curve shows the short-run relationship between
A) potential GDP and real GDP. B) the nominal interest rate and the real interest rate. C) tax rates and tax revenues. D) the unemployment rate and the inflation rate.
Say's law assures us that in the classical model, total spending is always enough to purchase the economy's total output
a. True b. False