Suppose the measured unemployment rate is 7.5% and the true natural rate of unemployment is 5.1%. If the chair of the Fed believes the natural rate of unemployment to be 6.7%, then the chair will
A) stimulate the economy when it should be slowed.
B) slow the economy when it should be stimulated.
C) stimulate the economy, exactly as called for.
D) slow the economy, exactly as called for.
C
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A payment made by the government to private producers of roads and libraries would be an example of
A) a subsidy. B) a copyright. C) a voucher. D) public provision. E) a Coase payment.
FIRREA increased the core-capital leverage requirement for thrift institutions from 3% to
A) 8%. B) 5%. C) 10%. D) 25%
Refer to Scenario 16.3. What is Sally's marginal rate of substitution of tee shirts for candy at the current distribution?
A) 9/4. B) 2 C) 4/9. D) It is impossible to determine without the prices of each commodity.
Although the long-run equilibrium price of oil is $80 per barrel, some producers have much lower costs because their oil reserves are relatively close to the surface and are easier to extract
If the low-cost producers have a minimum LAC equal to $20 per barrel, then the difference ($60 per barrel) is: A) an above-normal economic profit. B) an economic rent due to the scarcity of low-cost oil reserves. C) a profit that will go to zero as new oil producers enter the market. D) none of the above