As wages and prices become more flexible ________
A) wages becomes less responsive to unemployment deviations from the natural rate
B) it becomes easier to differentiate the short-run from the long-run Phillips curve
C) inflation becomes more responsive to unemployment deviations from the natural rate
D) all of the above
E) none of the above
C
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In order to pay for services such as health care, education, and highways, governments
A) collect taxes B) sell tools and machinery to the business sector C) rely fully on donations from the population
What does it mean for a loan to be in default?
A) when the borrower of the a loan fails to repay on schedule according to a loan contract, without the agreement of the lender B) when the borrower of a loan fails to repay on schedule according to a loan contract, with the agreement of the lender C) when the lender of a loan fails to supplies the full amount of a loan to the borrower D) when the lender of a loan supplies the full amount of a loan to a borrower without any promise of being repaid E) when the lender of a loan fails to offer the promised sum
Sam has $200 a month to spend on two normal goods-tanning sessions or rounds of golf. Tanning sessions are $20 each, and a round of golf is $40. Sam currently consumes six tanning sessions and two rounds of golf. If the price of a round of golf drops to $20, the income effect:
A. predicts Sam will increase his consumption of both golf and tanning sessions. B. predicts Sam will double his consumption of golf. C. predicts Sam will consume more golf and less tanning sessions. D. predicts Sam will consume less golf and more tanning sessions.
If the government finances increased spending strictly through higher taxes, this action
a. increases the multiplier effect. b. has no impact on the multiplier effect. c. decreases the multiplier to a value greater than one. d. decreases the multiplier to one.