The lowest possible unemployment rate that will not cause the inflation rate to increase is called:
A. the natural rate of unemployment.
B. "full employment."
C. the nonaccelerating inflation rate of unemployment (NAIRU).
D. All of these statements are true.
Answer: D
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When comparing the banking crisis in the United States to the crises in Latin America, cost to the taxpayers of the government bailouts was
A) higher in Latin American than in the United States. B) higher in the United States than in Latin America. C) about the same in both Latin America and the United States. D) positive in Latin America but negative in the United States.
The advertisers' dilemma occurs in markets where:
A. advertising slightly increases the firm's sales quantity. B. advertising greatly increases the firm's sales quantity. C. advertising has zero impact on the firm's sales quantity. D. advertising greatly decreases the firm's sales quantity.
Moving along which curve does the money wage rate and the price level change in the same proportions?
A) the AD curve B) the SAS curve C) the LAS curve D) None of the above because there is no curve along which both the money wage rate and the price level change in the same proportions.
Given the information in the table above, if the world equilibrium price of widgets were 4 cloth, then
A) both countries could benefit from trade with each other. B) neither country could benefit from trade with each other. C) each country will want to export the good in which it enjoys comparative advantage. D) neither country will want to export the good in which it enjoys comparative advantage. E) both countries will want to specialize in cloth.