Refer to Figure 15-7. Suppose the economy is in short-run equilibrium above potential GDP, the unemployment rate is very low, and wages and prices are rising
Using the static AD-AS model in the figure above, the correct Fed policy for this situation would be depicted as a movement from
A) A to E. B) B to C. C) C to D. D) C to B. E) A to B.
D
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The Phillips curve shows a negative relationship between the:
a. consumption rate and the unemployment rate. b. savings rate and the inflation rate. c. interest rate and the savings rate. d. inflation rate and the unemployment
Monopolistic competition is common in: a. retail selling
b. farming. c. basic manufacturing. d. electric power generation.
The process by which monopoly profits lead to technological progress in known as:
A. imperfect competition. B. destructive creation. C. creative destruction. D. economies of scale.
Refer to the production possibilities curve. At the onset of the Second World War, the Soviet Union was already at full employment. Its economic adjustment from peacetime to wartime can best be described by the movement from point:
A. c to point b.
B. b to point c.
C. a to point b.
D. c to point d.