Suppose that the economy experiences an increase in the inflation rate at the same time that the unemployment rate decreases. This situation indicates a:
a. shift in the Phillips curve.
b. movement along a vertical Phillips curve.
c. movement along a horizontal Phillips curve.
d. movement along a positively-sloped Phillips curve.
e. movement along a negatively-sloped Phillips curve.
e
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Trade results from
A) comparative advantage. B) diminishing returns. C) self-sufficiency. D) absolute advantage.
A sales tax creates a deadweight loss because
A) there is some paper work opportunity cost of sellers paying the sales tax. B) demand and supply both decrease. C) less is produced and consumed. D) citizens value government goods less than private goods. E) the government spends the tax revenue it collects.
If you lend a dollar for a year and at the end of the year the price level has risen by 10 percent
A) the purchasing power of your loan has risen over the year regardless of the interest rate at which you lent it. B) the purchasing power of your loan has remained constant over the year regardless of the interest rate at which you lent it. C) you must have earned a nominal interest rate of 10 percent to maintain the purchasing power of your loan. D) you must have earned a nominal interest rate of 5 percent to maintain the purchasing power of your loan.
If people act as if they systematically pursue their own self-interest, then they will most likely
A) respond irrationally to any incentive. B) respond to a given incentive in a random manner. C) respond predictably to a given incentive. D) not respond to any incentive.