If expectations are rational,
a. a predictable change in inflation can make the expected inflation rate deviate from the actual rate.
b. unemployment can exceed the full-employment rate even in the long run.
c. the difference between the actual inflation rate and the expected inflation rate must be a purely random number.
d. the inflation rate cannot be reduced without a period of high unemployment because the Phillips curve is downward sloping.
c
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The above figure illustrates a perfectly competitive firm. Curve C represents the
A) MR curve. B) ATC curve. C) MC curve. D) market demand curve. E) AFC curve.
An economist says: "The demand curve has two interpretations." What does the economist mean?
What will be an ideal response?
The above figure shows the demand and supply curves for housing. What would be the effects of a rent ceiling equal to $500 per month?
A) a surplus equal to 3,000 apartments B) a shortage equal to 3,000 apartments C) a shortage equal to 250 apartments D) nothing because the rent ceiling has no effect on the equilibrium price and quantity
A merger between two firms that produce identical goods would be called
A) a horizontal merger. B) a vertical merger. C) a Lerner merger. D) a duopoly.