If fluctuations in economic activity come from the supply side, higher inflation is associated with
a. lower interest rates.
b. structural deficits.
c. higher rates of unemployment.
d. lower rates of unemployment.
c
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The vertical long-run Phillips curve
a. indicates the permanent unemployment rate b. indicates the unemployment rate at the optimal level of GDP c. is only one of several vertical curves that together are called interest rate targets d. indicates the economy's natural rate of unemployment e. is more socially desirable than a horizontal Phillips curve would be
Payments for unemployment benefits sent to unemployed people are considered government purchases.
Answer the following statement true (T) or false (F)
Refer to Figure 4-3. At the equilibrium price of P1, consumers are willing to buy Q1 pounds of granola. Is this an economically efficient quantity?
A) Yes, because marginal cost is zero at the price of P1. B) No, the marginal cost of the last unit (Q1 ) exceeds the marginal benefit of the last unit. C) Yes, because P1 is the price where marginal benefit equals marginal cost. D) No, the marginal benefit of the last unit (Q1 ) exceeds the marginal cost of that last unit.
A dynamic decision is one that
A) is made very quickly. B) involves only the present. C) involves only the future. D) involves planning over more than one time period.