Suppose a country experiences an increase in output per worker. Such a development represents which of the following?
A) an increase in labor productivity B) an increase in population growth
C) a reduction in the saving rate D) a decrease in economic growth
A
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Based on the figure below. Starting from long-run equilibrium at point C, a tax increase that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies.
A. D; C B. D; B C. A; B D. B; C
According to the natural rate hypothesis, in the short run an increase in the inflation rate brings
A) an increase in the natural unemployment rate. B) an increase in the unemployment rate. C) no change in the unemployment rate. D) a decrease in the unemployment rate. E) a decrease in the natural unemployment rate.
The use of money is more efficient than barter because the introduction of money
A) reduces the need for economic specialization. B) reduces the need to exchange goods. C) reduces the need for other stores of value. D) reduces transaction costs.
Consider the same ultimatum game as in the previous question but consider some new preferences reflecting a desire for fairness. In particular, now assume players get 1 util per dollar earned but lose 1/4 util for the absolute difference between their monetary payoffs. Which of the following is an offer that arises in a subgame-perfect equilibrium with these new preferences?
a. 1. b. 2. c. 4. d. 5.