If people believe that the central bank is going to reduce inflation, then
a. the short-run Phillips curve shifts right and the sacrifice ratio will rise.
b. the short-run Phillips curve shifts right and the sacrifice ratio will fall.
c. the short-run Phillips curve shifts left and the sacrifice ratio will rise.
d. the short-run Phillips curve shifts left and the sacrifice ratio will fall.
d
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Refer to Figure 2-6. If the economy is currently producing at point E, what is the opportunity cost of moving to point D?
A) 26 thousand forks B) 0 spoons C) 16 thousand spoons D) 20 thousand forks
Assume a change in price causes the price elasticity of demand for a good (in absolute value) and marginal revenue to decrease. In this case we can conclude that the price of the good was:
A) increased. B) held constant. C) decreased. D) cannot be determined.
Keynesians view changes in velocity as the result of changes in
a. income. b. expectations. c. interest rates. d. inflation. e. all of the above.
In an economy experiencing a persistently falling price level:
a) potential GDP will necessarily exceed actual GDP. b) changes in nominal GDP may either overstate or understate changes in real GDP. c) changes in nominal GDP understate changes in real GDP. d) changes in nominal GDP overstate changes in real GDP.