The Phillips curve suggests that monetary policymakers could use monetary policy to
A. reduce the unemployment rate without affecting the inflation rate.
B. reduce inflation without affecting the unemployment rate.
C. reduce the unemployment rate at the expense of higher inflation.
D. reduce the unemployment rate while reducing inflation.
Answer: C
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If the price elasticity of demand for a good is less than one in absolute value, economists would characterize consumers of this good
A) as not very sensitive to price. B) as not very sensitive to the quantity they demand. C) as very sensitive to price. D) as elastic.
A corporation’s income is taxed
A. on a quarterly basis. B. when the returns are distributed to its owners. C. at very low rates to compensate for its unlimited liability. D. at the corporate level and at the level of its stockholders.
Demand for Shell gasoline will increase if the price of:
A. Motor vehicles increases. B. BP gasoline increases. C. BP gasoline decreases. D. Shell gasoline decreases.
Some economists argue that increases in government spending are not a likely source of continued inflation because
A) increases in government spending cause reductions in other spending components. B) government spending is not created by the Fed. C) increases in government spending can be financed by money creation. D) a and b E) a and c