Refer to Figure 17-2. Suppose the economy is at point C in the figure above. If workers adjust their expectations of inflation, which of the following will be true?
A) Workers and firms expect inflation to be 1%.
B) The short-run Phillips curve will shift to the right.
C) The natural rate of unemployment is 6%.
D) The economy will move from C to A.
E) The short-run Phillips curve will shift to the left.
E
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Assume that Virgil purchases a combination of products Y and Z such that, after he is done spending his entire budget, MUy / Py = 25 and MUz / Pz = 25. Based on the equal marginal principle, Virgil
A. should have purchased more Y and more Z. B. should have purchased less Y and more Z. C. is maximizing his total utility. D. should have purchased more Y and less Z.
The recession of 1990-1992 ________ the trend set over 1965-1990 of ________ unemployment rates at each successive cyclical trough
A) continued, lower B) continued, higher C) broke, lower D) broke, higher
By examining the data on the 18th century market for beaver furs, we learn an important economic lesson: Intense and growing competition in the absence of appropriate ____________ fails
a. property rights b. government controls c. price ceilings d. tort laws
Of the collection of supply and demand diagrams in Figure 2.2, which one shows the result of a decrease in the population of the group of people likely to buy a good?
A. Figure 1 B. Figure 2 C. Figure 3 D. Figure 4