In the 2-factor, 2 good Heckscher-Ohlin model, the production possibility frontier is kinked when
A) there is no factor substitution in production.
B) the opportunity cost of production is constant.
C) there are unemployed factor resources.
D) a country does not engage in trade.
E) transportation costs are very high.
A
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In the figure above, the shift from the short-run Phillips curve SRPC0 and the long-run Phillips curve LRPC0 to the short-run Phillips curve SRPC1 and the long-run Phillips curve LRPC1 is the result of ________ in the expected inflation rate and
________ in the natural unemployment rate. A) a decrease; no change B) no change; an increase C) an increase; an increase D) an increase; no change E) a decrease; a decrease
If workers and firms raise their inflation expectations,
A) unemployment will fall. B) the short-run Phillips curve will be vertical. C) the short-run Phillips curve will shift upward. D) actual inflation will fall to match expected inflation.
Holding everything else constant, an increase in the price of raisins will result in
A) an increase in the quantity of raisins demanded. B) a decrease in the quantity of raisins demanded. C) an increase in the demand for raisins. D) a decrease in the supply of raisins.
Related to the Economics in Practice on page 36: In the survey conducted by Esther Duflo and Abhijit Banerjee, the extremely poor were found to consume ________ of their budgets on food compared to people in the United States.
A. about the same percentage B. a slightly lower percentage C. approximately 50 percent less D. a significantly higher percentage