Using typical estimates of the sacrifice ratio, how much output would likely be sacrificed to reduce inflation from 4 percent to 2 percent?
The typical estimate of the sacrifice ratio suggests reducing inflation by one percent requires sacrificing about 5 percent of one year's output. Therefore, reducing inflation from 4 percent to 2 percent would sacrifice about 10 percent of one year's output.
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If the price level rises faster than the money wage rate, the real wage rate falls
Indicate whether the statement is true or false
Which of the following is true of entrepreneurs? They
A) Generally work fewer hours per week than wage and salary employees. B) All of the above. C) Are adept at discovering profitable opportunities that are often overlooked by others. D) Have low saving rates and excessive debt.
In the long run, the entry of new firms in an industry
A) harms consumers by forcing prices up above the level of average cost. B) benefits consumers by forcing prices down to the level of total cost. C) harms consumers by forcing prices up above the level of total cost. D) benefits consumers by forcing prices down to the level of average cost.
Refer to the information provided in Figure 2.4 below to answer the question(s) that follow.
Figure 2.4According to Figure 2.4, Point E necessarily represents
A. only motorcycles being produced. B. overallocation of resources. C. an impossible production point. D. technological advancement.