Prices are sticky as a result of
A. market competition.
B. rational inattention.
C. rational expectations.
D. frequent information updates.
Answer: B
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A group of firms that has entered into an agreement to restrict output and increase prices and profits is called
A) a compliance. B) a cartel. C) an oligopoly. D) a duopoly. E) a multi-firm monopoly.
In the above figure, the axis break in the x-axis
A) reflects the fact that for the years covered in the figure, the unemployment rate was never less than 3 percent. B) shows that there is no relationship between inflation and unemployment. C) misleadingly shows that inflation has changed very little even though the unemployment rate has increased a great deal. D) implies that for the years covered in the figure, the inflation rate was always greater than 1 percent.
What is the best description of Northern wages from 1860-1864?
a. A relatively large decrease in demand relative to the decrease in supply led to lower wages and fewer people working. b. An increase in the demand for labor and decrease in the supply of labor led to lower wages and fewer people working. c. Increases in both the demand and supply for labor led to more people employed who were working for about the same wages. d. A decrease in the demand for labor coupled with an increase in the supply led to many fewer people working, but those who were employed worked for higher wages.
If inflation is both high and volatile:
A. nominal interest rates will also be high and volatile since real interest rates are stable. B. lenders may be unwilling to lend out of fear of unexpected increases in inflation. C. real interest rates will also be high and volatile since nominal interest rates are stable. D. borrowers may be unwilling to borrow out of fear of unexpected increases in inflation.