Answer the following statements true (T) or false (F)
1. A rightward shift of the Phillips Curve suggests that a lower rate of unemployment is associated with each inflation rate.
2. In the context of the Phillips curve, stagflation can only be understood as a rightward shift of the curve.
3. A stable Phillips curve does not allow for the possibility of stagflation.
4. The implication of the long-run Phillips Curve is that there is no trade-off between inflation and unemployment in the long-run.
5. The long-run Phillips Curve is essentially a horizontal line at the economy's natural rate of inflation.
1. F
2. T
3. T
4. T
5. F
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The above figure shows the marginal private cost curve, marginal social cost curve, and marginal social benefit curve for raising goats on a common pasture
A quota to prevent the overuse of the common pasture sets the number of goats to be raised equal to ________. A) 0 goats B) 40 goats C) 50 goats D) 55 goats
If the social value of producing a good is always higher than the private value of producing it, then there is a
a. negative externality associated with the production of the good, and the market equilibrium quantity of the good is less than the socially optimal quantity. b. negative externality associated with the production of the good, and the socially optimal quantity of the good is less than the market equilibrium quantity. c. positive externality associated with the production of the good, and the market equilibrium quantity of the good is less than the socially optimal quantity. d. positive externality associated with the production of the good, and the socially optimal quantity of the good is less than the market equilibrium quantity.
If the price level is fixed, then a decrease in government spending will lead to
A. a smaller decrease in nominal GDP than in real GDP. B. no decrease in either nominal GDP or real GDP. C. a larger decrease in nominal GDP than in real GDP. D. a decrease in nominal GDP by the same amount as a decrease in real GDP.
One reason that DOWN,RIGHT is not a NASH equilibrium is that
a. Player B receives a payoff of 8 as opposed to the payoff of 20 that he would receive if he changed his strategy. b. Player B receives a payoff of 20 as opposed to the payoff of 30 that he would receive if he changed his strategy. c. Player A receives a payoff of 20 as opposed to the payoff of 30 that he would receive if he changed his strategy. d. DOWN, RIGHT is a Nash equilibrium.