Using the Phillips curves, what are the short-run and long-run effects of a decrease in the inflation rate?
What will be an ideal response?
In the short run, there is first a downward movement along the short-run Phillips curve as the inflation rate falls and the unemployment rate increases. In the long run, however, the expected inflation rate falls and the short-run Phillips curve shifts downward. Therefore in the long run the inflation rate remains low and the unemployment rate returns to the natural unemployment rate.
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Goods and services are sold
A) only as intermediate goods. B) by households. C) in the factor markets. D) in the product markets.
Net exports ________ the autonomous expenditure multiplier
A) reduce B) increase C) A or B D) have no effect on
Appendix: In Dutch auctions, the bidding
a. starts low and rises until the highest bidder wins. b. is done in secret "sealed bids" which are opened at a specified time. c. begins with a very high price, and is reduced until the first person takes it. d. is accomplished by giving the price of the second highest bid to the highest bidder.
What is an ascending-value auction?