When policymakers base their actions on a rule there is
A. rationalization policymaking.
B. active policymaking.
C. rational expectations policymaking.
D. passive policymaking.
Answer: D
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Use the following diagrams to answer the next question.
Which of the diagrams represents the short-run Phillips Curve?
A. Graph A B. Graph B C. Graph C D. Graph D
Which of the following statements is true?
A) A decrease in supply causes equilibrium price to rise; the increase in price then results in a decrease in quantity demanded. B) If demand increases and supply decreases one cannot determine if equilibrium price will increase or decrease without knowing which change is greater. C) An increase in demand causes an increase in equilibrium price; the increase in price causes supply to increase. D) If both demand and supply decrease, there must be a decrease in equilibrium price; equilibrium quantity may either increase or decrease.
The used car market may be inefficient because the purchase of a used car often involves
a. natural selection b. moral hazard c. hidden actions d. open-access resources e. hidden characteristics
Increased opportunities for trade increase production by
A. Protecting countries from competition. B. Improving efficiency through specialization. C. Encouraging countries to be self-sufficient. D. Shifting the production possibilities curve outward.