The short-run relationship between inflation and unemployment is often called
a. the Classical Dichotomy.
b. Money Neutrality.
c. the Phillips curve.
d. None of the above is correct.
c
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The addition of government to the circular-flow model illustrates that government
A. purchases goods in the product market. B. provides services to businesses and households. C. purchases resources in the resource market. D. does all of these.
When the money supply increases at the same time that velocity is decreasing, total spending will
A) always rise. B) always decline. C) fall if the decrease in velocity is relatively less than the increase in the money supply. D) fall if the decrease in velocity is relatively greater than the increase in the money supply.
Suppose sport utility vehicles get poor gas mileage compared to other available cars. If the price of gasoline increases, then one would expect:
A. the demand for sport utility vehicles to increase. B. the quantity demanded of sport utility vehicles to decrease. C. the demand for sport utility vehicles to decrease. D. the demand for gasoline to decrease.
Kara was out jogging and, despite being tired, decided to run one more mile. Based on her actions, economists would conclude that Kara:
A. must be an avid runner. B. decided that the marginal benefit of running one more mile would outweigh the cost of the additional mile. C. decided that the marginal cost of running one more mile would outweigh the benefit of the additional mile. D. was not very tired, so the marginal cost of the extra mile was very low.