To identify whether fiscal policy is expansionary or contractionary, one should focus on the cyclical deficit
Indicate whether the statement is true or false
False
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In the long run, unemployment will be at the natural rate. This implies that
A. there is a one-to-one relationship between unemployment and inflation and consequently, the Phillips curve is vertical. B. there is no relationship between unemployment and inflation and consequently, the Phillips curve is vertical. C. there is a positive relationship between unemployment and inflation and consequently, the Phillips curve is upward-sloping. D. there is a negative relationship between unemployment and inflation and consequently, the Phillips curve is downward-sloping.
Exhibit 8-2 Consumption function
As shown in Exhibit 8-2, the marginal propensity to consume (MPC) is:
A. 0.25. B. 0.50. C. 0.75. D. 0.90.
Which of the following is NOT a precondition for price discrimination?
A) The product cannot be resold to another customer. B) The price elasticities of demand are different for each group of consumers. C) The product is a durable good. D) The seller must have some market power.
Subway is a fast-food restaurant chain. Which of the following would be a long-run decision for Subway?
A. hire one more worker in a restaurant location B. supply more subs in one restaurant C. replace the manager of a restaurant D. open a new restaurant in a city