If fiscal policy authorities believe that the natural rate of unemployment is lower than it actually is, and pursue fiscal policies to move economic output to what they believe full employment to be, then which of the following is most likely to occur?
a. A recession
b. Runaway inflation
c. Increasing unemployment
d. A depression
b
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The Laspeyres price index tends to ________ the ideal cost-of-living index
A) be higher than B) be lower than C) be equal to D) zero faster than
Bid-rigging is less likely in
a. oral auctions b. second-price auctions c. first-price sealed-bid auctions d. all are equally likely
Which of the following will cause an upward movement along the aggregate supply curve?
a. An increase in the price level of all goods and services b. A decrease in the price level of all goods and services c. A technological improvement in the country d. An increase in the physical capital of a country
Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C