What does the Phillips curve illustrate, and what changes in the AS-AD model support this relationship?
What will be an ideal response?
The Phillips curve illustrates the inverse relationship between the rate of unemployment and the rate of inflation. If the aggregate supply curve is upward-sloping, an increase in aggregate demand will cause an increase in output and an increase in price level. This may translate into a decrease in unemployment and an increase in inflation. A leftward shift of aggregate demand will cause a decrease in output (or an increase in unemployment) and a decrease in the price level. This supports the inverse relationship of the Phillips curve.
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If a firm's marginal cost exceeds its average cost, then its average cost must be rising
a. True b. False Indicate whether the statement is true or false
Define the following terms and explain their importance to the study of economics
a. poverty line b. economic discrimination c. optimal inequality d. negative income tax
Suppose you borrow $50,000 from your bank to purchase a Tesla vehicle. This is an example of
A. indirect financing. B. direct financing. C. transaction costs. D. moral hazard.
Currency traders expect the dollar to appreciate. What impact will this have on equilibrium in the foreign exchange market?
A) The dollar will appreciate, and the equilibrium quantity of dollars will decrease. B) The dollar will depreciate, and the equilibrium quantity of dollars exchanged will decrease. C) The dollar will appreciate, and the equilibrium quantity of dollars will increase. D) The dollar will appreciate, and the change in the equilibrium quantity of dollars exchanged cannot be determined.