The typical relationship between inflation and unemployment is
A) unemployment changes do not directly lead to changes in inflation, but inflation changes may cause changes in unemployment.
B) as unemployment falls, inflation increases.
C) as unemployment falls, nothing happens to inflation.
D) as unemployment falls, inflation falls.
B
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The short run is best defined as:
A. a period of time sufficiently short that at least one factor of production is fixed. B. one year or less. C. the period of time between quarterly accounting reports. D. a period of time sufficiently short that all factors of production are variable.
Suppose two countries have identical growth rates of real GDP and the same initial value of per capita real GDP. We know, then, that
A) living standards may differ in the two countries because we don't know how income is distributed in the countries. B) economic well being is the same in both countries. C) living standards in the two countries are probably identical, or very close to each other. D) life expectancies are the same in both countries.
Water bottlers announce that next month the price of bottled water will rise by 25 percent. Which of the following occurs immediately?
A) The demand for bottled water decreases. B) The demand for bottled water increases. C) The quantity of bottled water demanded increases. D) The quantity of bottled water demanded decreases. E) None of the above answers is correct because it is the supply that immediately changes, not the demand.
If farmers operating in the competitive wheat industry are incurring losses, and are not kept in business with government subsidies, which of the following will result?
A) Price and quantity produced will both increase in the long run. B) Resources will be reallocated out of the wheat industry into more productive uses. C) Farmers will run economic losses indefinitely, if they are rational. D) The supply of wheat will fall to near zero and the U.S. will become dependent on foreign suppliers of food.