Believers in the hypothesis of rational expectations argue that:
a. expansionary fiscal and monetary policy can reduce unemployment without creating inflation.
b. a trade-off exists between unemployment and inflation even in the long run
c. the Phillips curve is vertical even in the short run for expected changes in inflation.
d. the Phillips curve is downward sloping even in the long run.
c
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What is the maximum a monopolist would be willing to spend on rent-seeking behavior?
What will be an ideal response?
Suppose Lisa spends all of her money on books and bagels, and a bagel is an inferior good for her. When the price of coffee increases, the
A) consumption of coffee will fall. B) consumption of coffee will rise. C) consumption of coffee will not change. D) Not enough information.
A firm that screens candidates to determine how well they would work with limited supervision is afraid of facing
a. Adverse selection b. Moral hazard c. Forced bankruptcy d. None of the above
The amount by which aggregate spending at full employment exceeds full employment output is known as the:
A. Inflationary gap. B. Recessionary gap. C. Deflationary gap. D. Multiplier effect. E. Crowding out.