According to the Lucas supply function, if the expected price level is larger than the actual price level
A. real output increases.
B. real output decreases.
C. nominal output decreases.
D. nominal output increases.
Answer: B
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Everything else held constant, when the federal funds rate is ________ the interest rate paid on reserves, the quantity of reserves demanded rises when the federal funds rate ________
A) above, rises B) above, falls C) below, rises D) below, falls
A monopolistic competitive firm is inefficient because the firm:
a. earns positive economic profit in the long run. b. is producing at an output corresponding to the condition that marginal cost equals price. c. is not maximizing its profit. d. produces an output where average total cost is not minimum.
Jobs that involve pleasant work, as opposed to jobs that involve unpleasant work, usually pay
a. higher wages, because jobs that involve pleasant work typically require more education than do jobs that involve unpleasant work. b. higher wages, because jobs that involve pleasant work typically require more well-developed personality skills than do jobs that involve unpleasant work. c. lower wages, because workers typically are not attracted to jobs that involve unpleasant work unless there is a monetary inducement. d. lower wages, because workers who take jobs that involve unpleasant work typically stay in those jobs for relatively long periods of time and accumulate significant experience.
The very low inflation that the U.S. experienced in 2009 and 2010
a. appears to have reduced expected inflation, and the short-run Phillips curve shifted downward as a result. b. appears to have reduced expected inflation, and the short-run Phillips curve shifted upward as a result. c. does not appear to have reduced expected inflation, and the short-run Phillips curve remained relatively stable as a result. d. does not appear to have reduced expected inflation, but the short-run Phillips curve shifted dramatically nevertheless.