If the CEO of a large corporation uses the corporate jet to fly friends to the Super Bowl at company expense, this is most clearly an example of
a. the duality problem.
b. the violation of ceteris paribus conditions.
c. a negative externality.
d. the principal-agent problem.
D
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A higher inflation rate can lead to lower unemployment if ________ mistakenly expect the inflation rate to be lower than it turns out to be
A) workers, but not employers B) employers, but not workers C) both workers and employers D) neither workers nor employers
Because of an expected rise in interest rates in the future, a banker will likely
A) make long-term rather than short-term loans. B) buy short-term rather than long-term bonds. C) buy long-term rather than short-term bonds. D) make either short or long-term loans; expectations of future interest rates are irrelevant.
If the unemployment rate is below the natural rate, then
a. inflation is less than expected. As inflation expectations are revised the short-run Phillips curve will shift right. b. inflation is less than expected. As inflation expectations are revised the short-run Phillips curve will shift left. c. inflation is greater than expected. As inflation expectations are revised the short-run Phillips curve will shift left. d. inflation is greater than expected. As inflation expectations are revised the short-run Phillips curve will shift right.
Which of the following events, ceteris paribus, would cause a rightward shift in the demand curve for euros?
a. an decrease in the average income of European consumers b. an increase in European tastes for American goods c. an increase in the average income of U.S. consumers d. an increase in U.S. tariffs on European goods