If the Fed tries to lower the unemployment rate so it is lower than the natural unemployment rate, in the short run before the expected inflation rate changes, the SRPC ________ and the LRPC ________
A) shifts downward; shifts leftward
B) shifts downward; does not change
C) does not change; shifts rightward
D) shifts upward; does not change
E) does not change; does not change
E
You might also like to view...
The efficient markets hypothesis predicts that stock prices follow a "random walk." The implication of this hypothesis for investing in stocks is
A) a "churning strategy" of buying and selling often to catch market swings. B) turning over your stock portfolio each month, selecting stocks by throwing darts at the stock page. C) a "buy and hold strategy" of holding stocks to avoid brokerage commissions. D) following the advice of technical analysts.
When the demand for money depends only on real income, the resulting ________ LM curve causes fiscal policy to have a ________ effect on income
A) vertical, very strong B) vertical, zero C) horizontal, very strong D) horizontal, zero
For resources with vertical supply curves, earnings comprise of both economic rent and transfer earnings
a. True b. False Indicate whether the statement is true or false
If monopolistically competitive firms earn short-run economic profits, we expect to see
A) new firms enter the industry, which shifts the demand curves of the existing firms to the left until firms earn zero economic profits. B) new firms trying to enter the industry, but unable to do so because of barriers to entry. C) existing firms altering their scale of plant to try to capture larger profits. The combined effect is to cause all firms to earn zero economic profits. D) existing firms increasing prices to try to capture larger economic profits.