Suppose the economy is producing at the natural rate of output and the government passes legislation that severely restricts a company's ability to reduce production costs via outsourcing
Everything else held constant, this policy action will cause ________ in the unemployment rate in the short run and ________ in inflation in the short run. A) an increase; an increase
B) a decrease; a decrease
C) a decrease; an increase
D) no change; no change
A
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Among the factors that create a deadweight loss and inefficiency are
A) minimum wages, but not taxes. B) rent ceilings, but not taxes. C) taxes, but not minimum wages or rent ceilings. D) minimum wages, rent ceilings, and taxes.
Refer to Figure 2-8. If Vidalia chooses to produce 40 dozen orchids, how many roses can it produce to maximize production?
A) 30 dozen roses B) 50 dozen roses C) 100 dozen roses D) 150 dozen roses
What is investment in a closed economy if you have the following economic data?
Y = $10 trillion C = $5 trillion TR = $2 trillion G = $2 trillion A) $2 trillion B) $3 trillion C) $5 trillion D) cannot be determined without information on taxes (T)
A price ceiling below the market clearing price results in I. excess quantity demand II. excess quantity supplied III. entry of new producers
A) I only B) II only C) III only D) Both I and III