Refer to Figure 15-11. In the dynamic model of AD-AS in the figure above, the economy is at point A in year 1 and is expected to go to point B in year 2, and the Federal Reserve pursues policy. This will result in
A) unemployment rates higher than what would occur if no policy had been pursued.
B) real GDP lower than what would occur if no policy had been pursued.
C) short-term interest rates higher than what would occur if no policy had been pursued.
D) inflation higher than what would occur if no policy had been pursued.
D
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Kinks in budget constraints always produce non-convexities in choice sets.
Answer the following statement true (T) or false (F)
Under perfect competition in the resource market, the marginal factor cost curve:
a. is positively sloped. b. is vertical. c. is negatively sloped. d. is horizontal. e. does not exist.
In which of the following cases can we be certain that a natural resource has become scarcer?
a. both the demand for the resource and the supply of the resource have increased. b. both the demand for the resource and the supply of the resource have decreased. c. the demand for the resource has increased and the supply has decreased. d. the demand for the resource has decreased and the supply has increased.
An increase in the supply of labor to an industry could be caused by
A. an increase of wages in another industry. B. an increase in job flexibility in the industry. C. higher wages. D. increased productivity of labor.