The sacrifice ratio is the percentage point increase in the unemployment rate created in the process of reducing inflation by one percentage point
a. True
b. False
Indicate whether the statement is true or false
False
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The marginal social costs and abatement costs of a certain type of air pollution for a factory are given as:
MSC = -1121 + 22.5Q MCA = 879 - 17.5Q, where Q = units of pollution per day, and MSC and MCA are measured in dollars. The factory is located in a small town that is currently setting community standards. You have been hired to perform the analysis requested below. a. If the community wishes to set a pollution standard for the factory, what daily level of pollution should be allowed? b. As an alternative, some members of the town council favor an emissions tax for the factory. If a tax is implemented, at what level should the tax be set?
Consider a consumer choosing between spending her money on food, F, or clothing, C. Assume that a unit of food and a unit of clothing have the same price, and that the consumer can afford a total of 20 units of either food or clothing. This is an example of:
A. a constrained optimization problem. B. a sunk cost. C. a sinking cost. D. the No Marginal Improvement Principle.
Starting from long-run equilibrium, a war that raises government purchases results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; potential C. higher; higher D. lower; higher
Futures contracts differ from forward contracts in that
A) future contracts ensures you will receive a certain amount of foreign currency at a specified future date. B) future contracts bind you into your end of the deal. C) future contracts allow you to sell your contract on an organized futures exchange. D) future contracts are a disadvantage if your views about the future spot exchange rate are to change. E) futures contracts don't allow you to realize a profit of a loss right away.