Which of the following will be least effective in dealing with the structural adjustment problems?
A. A fall in domestic labor costs
B. Trade restrictions that raise foreign goods prices
C. A rise in foreign labor costs
D. A fall in foreign goods prices
Answer: D
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A move up, along the short-run Phillips curve represents a decrease in the unemployment rate.
Answer the following statement true (T) or false (F)
Why do permanent tax cuts have a greater impact on consumption than temporary tax cuts?
a. Permanent tax cuts have a greater effect on expected long-run inflation. b. Permanent tax cuts are perceived as minor while temporary tax cuts are larger and more effective. c. Permanent tax cuts cause movement along the consumption function, while temporary tax cuts shift the consumption function. d. Permanent tax cuts affect expectations of long-run income more than temporary tax cuts.
Someone who derives benefits from something not paid for is a ______.
a. negative spillover b. rival consumer c. free rider d. moral hazard
Suppose that the elasticity of demand for newspapers is 2.0 and quantity demanded decreases by 40%. What must the percentage increase in price have been?
A. 2% B. 20% C. 80% D. 200%