The short-run Phillips curve relationship implies that the inflation rate
A. is higher when the natural unemployment rate is also higher.
B. is constant regardless of the actual unemployment rate.
C. is higher when the actual unemployment rate is also higher.
D. is higher when the actual unemployment rate is lower.
Answer: D
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Suppose the quality of beef changes over time, but the quality change goes unmeasured for the purpose of computing the consumer price index. In which of the following instances would the bias resulting from the unmeasured quality change be least severe?
a. The quality of beef deteriorates and beef becomes more expensive relative to other goods. b. The quality of beef deteriorates and beef becomes less expensive relative to other goods. c. The quality of beef improves and beef becomes more expensive relative to other goods. d. The quality of beef improves and the price of beef relative to other prices remains unchanged.
The elasticity that measures the responsiveness of consumer demand to changes in income is the:
A. neither the income elasticity, the own price elasticity, nor the cross-price elasticity. B. own price elasticity. C. cross-price elasticity. D. income elasticity.
Changes in the federal funds rate influence the economy's growth rate through all of the following except by:
A. making it more or less expensive to borrow. B. making investment spending more or less attractive. C. altering the real interest rate when inflation is changing quickly. D. making it more or less attractive to people save.
Using the basic supply/demand framework, economic analysis of market structure leads to the conclusion that:
A. oligopoly promotes efficient outcomes, whereas the other market structures are associated with some deadweight loss. B. monopolistic competition promotes efficient outcomes, whereas the other market structures are associated with some deadweight loss. C. monopoly promotes efficient outcomes, whereas the other market structures are associated with some deadweight loss. D. perfect competition promotes efficient outcomes, whereas the other market structures are associated with some deadweight loss.