Factors of production are the most likely to earn economic rent when they:
A. are used by many different firms.
B. are fixed in the short run.
C. cannot easily be duplicated.
D. have high reservation prices.
Answer: C
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Holding other factors constant, if employers automatically enroll employees in retirement savings programs in order to overcome psychological barriers to saving, then the real interest rate will ________ and the equilibrium quantity of saving and investment will ________.
A. increase; decrease B. increase; increase C. increase; not change D. decrease; increase
The model that states that individuals develop their inflation expectations after considering all the available information is referred to as the:
A) adaptive expectations model. B) marginal expectations model. C) composite expectations model. D) rational expectations model.
Optimal currency areas should have ________ in order to succeed
A) high labor mobility B) low labor mobility C) imperfectly mobile capital D) few policy externalities
According to the Phillips curve, a more expansionary macro-policy that causes inflation to be greater will:
a. place downward pressure on prices. b. reduce unemployment. c. reduce output. d. reduce the natural rate of unemployment.