In the short run, a price increase in the goods and services market measured by the CPI will:
A. increase the purchasing power of money.
B. improve producer profits and, thereby, induce suppliers to expand output.
C. increase resource prices, lower profits, and lead to a decline in output.
D. reduce the natural rate of unemployment.
Answer: B
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According to John Rawls, the fair distribution of income is the one that
A) makes the poorest person as well off as possible. B) makes the average person as well off as possible. C) results in equal income for all society members. D) is based on fair rules.
According to the life-cycle hypothesis, MPCs will
a. be relatively low for young adults, rise during middle age, and then rise again near or in retirement b. be relatively high for young adults, fall during middle age, and then rise again near or in retirement c. be relatively high for young adults, fall during middle age, and then fall again near or in retirement d. be relatively low for young adults, rise during middle age, and then fall again near or in retirement e. remain relatively constant over a person's life cycle
Unemployment is not caused by
A. drops in actual GDP. B. persons looking for more suitable jobs. C. inflation. D. technological disruption.
If two variables move in opposite directions, they are said to be negatively correlated.
Answer the following statement true (T) or false (F)