In the short run, a price increase in the goods and services market measured by the CPI will:
a. increase the purchasing power of money
b. improve producer profits and, thereby, induce suppliers to expand output.
c. increase resource prices, lower profits, and lead to a decline in output.
d. reduce the natural rate of unemployment.
b
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In the utility maximizing model, consumer preferences are assumed to be transitive. What does this mean?
A) that consumers have the freedom to change their preferences from time to time B) that consumers prefer more of a good to less C) that consumers go through cycles in their consumption behavior D) that consumers have preferences that are relatively consistent in the time period under consideration
Which of the following is false?
a. Expansionary fiscal policy will tend to cause net exports to fall b. The larger the crowding out effect, the smaller the actual effect of a given change in fiscal policy. c. The crowding out effect does not occur with a tax change. d. Starting from an initial recession equilibrium, expansionary fiscal policy could potentially increase employment to the full employment level.
When government spending is equal to the tax revenues during a specific time period, this is known as a
A) government budget deficit. B) government budget surplus. C) balanced budget. D) public debt.
What are the three main kinds of unemployment?
A) frictional, seasonal, and cyclical B) structural, frictional, and cyclical C) cyclical, structural, and temporary D) temporary, permanent, and volunteer