The long-run Phillips curve would shift left if
a. the money supply increased or if the minimum wage was reduced.
b. the money supply increased but not if the minimum wage was reduced.
c. the minimum wage was reduced but not if the money supply increased.
d. None of the above is correct.
c
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The Keynesian short-run aggregate supply curve is horizontal because
A) it represents Say's law. B) it reflects wage and price inflexibility. C) it represents the full employment level of real GDP. D) it reflects the absence of money illusion.
When considering the demand for money curve, the interest rate
A) is the price of holding money. B) varies negatively with the transactions demand for money. C) will have a positive relationship with the quantity of money demanded. D) is independent of the opportunity cost of money.
? Newspaper recycling has been highly successful—perhaps too successful, given that many households gather and return their newspapers to recycling centers. The amount of newspapers recycled has dramatically increased, along with the number of recycling plants. Yet newspapers prefer regular newsprint over recycled newsprint, so the demand for recycled newsprint has remained essentially unchanged. The result of this for the recycled newsprint market is
A. a decrease in the supply and a higher price for recycled newsprint. B. an increase in the supply and a lower price for recycled newsprint. C. an increase in the supply and a higher price for recycled newsprint. D. a decrease in the supply and an increase in the demand for recycled newsprint.
If the price elasticity of demand for smart watches is 1.4 (dropping the minus sign), then a 50 percent increase in the price of smart watches will lead to
A. the sale of 200 additional smart watches. B. the sale of 125 percent fewer smart watches than before. C. the sale of 70 percent fewer smart watches than before. D. the sale of 25 percent fewer smart watches than before.