The long-run Phillips curve shows the relationship between the ________ and the ________ when there is no ________ unemployment
A) inflation rate; employment rate; seasonal
B) inflation rate; unemployment rate; cyclical
C) inflation rate; unemployment rate; structural
D) nominal interest rate; real interest rate; frictional
E) nominal interest rate; unemployment rate; cyclical
B
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Suppose the Fed decreases the money supply. In response households and firms will ________ short term assets and this will drive ________ interest rates
A) sell; down B) buy; down C) sell; up D) buy; up
Four stores have a problem with theft and security is a public good. Let S stand for the number of person-hours of security patrols per week. The marginal benefit of security patrols to each of the stores is given by the formula MB = 200/(1 + S). Patrols cost $25 per hour. If each store provided security independently, how much would each store purchase?
A. 15 person-hours of patrols per week B. 7 person-hours of patrols per week C. 8 person-hours of patrols per week D. 16 person-hours of patrols per week
Holey Doughnuts and Clair's Eclairs want to merge. Each has 2 percent of the local pastry market. It is most likely that
a. the Department of Justice would challenge the merger but the Federal Trade Commission would not b. the Federal Trade Commission would challenge the merger but the Department of Justice would not c. the merger will go unchallenged because it will not tend to reduce competition d. the government will successfully challenge the merger because it is a horizontal merger e. the government will successfully challenge the merger because it is a vertical merger
The only way that an economy can increase its rate of consumption in the long run is by increasing the amount that it produces
a. True b. False Indicate whether the statement is true or false