An increase in the marginal cost arising from a more complex specialized investment environment will cause the optimal contract length to:
A. either increase or decrease.
B. remain constant.
C. increase.
D. decrease.
Answer: D
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If the Phillips curve aids in forecasting inflation then
A) forecast errors from an alternative forecasting procedure should not be correlated with output fluctuations. B) there should be no correlation between forecast errors from an alternative forecasting procedure and output fluctuations. C) the Phillips curve is upward-sloping. D) the Phillips curve is downward-sloping.
An economy that grows in world interdependence experiences
(a) growing trade on the basis of comparative advantage. (b) more vulnerability to the business cycles of trading partners. (c) wealth accumulation. (d) all of the above.
The Social Security tax, and to a large extent, the federal income tax, are labor taxes
a. True b. False Indicate whether the statement is true or false
Losers from inflation include:
a. savers and borrowers. b. landlords and the government. c. borrowers and the government. d. those on a fixed income and borrowers. e. those on a fixed income and savers.