Under adaptive expectations theory, an increase in the short-run aggregate demand curve ____ the inflation rate and ____ the unemployment rate.
A. increases; increases
B. increases; decreases
C. increases; does not change
D. decreases; increases
Answer: B
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When economic profits are zero for a firm in a perfectly competitive market, it means that:
A. average total costs are zero. B. price is equal to minimum average total cost. C. average variable costs are minimized. D. MR is equal to AVC.
Ben N. Jerry prefers to keep his $10,000 retirement savings buried in the backyard. After an increase in the price level, Ben reduces the amount of goods and services he wants to purchase. Ben's rationalization, that now his retirement savings won't buy as much, is consistent with which explanation of the aggregate demand curve's negative slope?
a. the interest rate effect b. the open economy effect c. the inflation effect d. the wealth effect
During 1980-2009, the countries achieving the most rapid growth of real GDP were nearly all
a. high-income developed economies. b. low-income less developed economies at the beginning of the period. c. South American economies. d. European economies. e. African economies.
Common property often results in
A) a negative externality. B) a social benefit. C) more efficient production of goods. D) exclusive rights of ownership.