Use the following diagram to answer the next question.
Which of the following best describes the short-run effect of the change shown in the diagram?
A. The unemployment rate rises, but the rate of inflation falls.
B. The unemployment rate falls, but the rate of inflation rises.
C. Both the unemployment rate and the rate of inflation fall.
D. Both the unemployment rate and the rate of inflation rise.
Answer: B
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When the Fed changes the quantity of money, there is an immediate effect on
A) the inflation rate but not the price level. B) the nominal interest rate. C) real GDP. D) the price level and the inflation rate. E) the price level but not the inflation rate.
Refer to Figure 3-6. The figure above represents the market for coffee grinders. Assume that the market price is $21. Which of the following statement is true?
A) There will be a shortage that will cause the price to increase; demand will then decrease and supply will increase until the price equals $25. B) There is a shortage that will cause the price to increase; quantity demanded will then decrease and quantity supplied will increase until the price equals $25. C) There is a shortage that will cause the price to increase; quantity supplied will then decrease and quantity demanded will increase until the price equals $25. D) There is a shortage that will cause the price to decrease; quantity demanded will then increase and quantity supplied will decrease until the price equals $25.
The above figure shows a graph of the market for pizzas in a large town. If the price falls from $10 to $7 per pizza, the quantity of pizzas demanded will
A) increase by 20. B) decrease by 30. C) increase by 30. D) decrease by 10.
A situation in which union membership is required before a person can be hired is a
A) closed shop. B) union shop. C) agency shop. D) restricted shop.