Suppose Americans become concerned about saving for retirement and, as a result, reduce their current consumption expenditures. Which of the following would you expect to occur as a result of this change?
a. In the short run, unemployment will increase and inflation will fall.
b. In the short run, unemployment will increase and inflation will rise.
c. In the short run, unemployment will decrease and inflation will rise.
d. In the short run, unemployment will decrease and inflation will fall.
a
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What types of unemployment will still exist when the economy is at the natural rate of unemployment?
A) frictional, structural, and cyclical unemployment B) frictional and cyclical unemployment only C) frictional and structural unemployment only D) structural and cyclical unemployment only
Refer to Figure 14.2. Other things equal, a decrease in inflationary expectations would best be represented by a movement from
A) point A to point B. B) point B to point A. C) point C to point B. D) point B to point C.
The Sherman Antitrust Act prohibits price-fixing in the sense that
a. competing executives cannot even talk about fixing prices. b. competing executives can talk about fixing prices, but they cannot take action to fix prices. c. a price-fixing agreement can lead to prosecution provided the government can show that the public was not well-served by the agreement. d. None of the above is correct. The Sherman Act did not address the matter of price-fixing.
The wealth effect stems from the idea that a higher price level
a. increases the real value of households' money holdings. b. decreases the real value of households' money holdings. c. increases the real value of the domestic currency in foreign-exchange markets. d. decreases the real value of the domestic currency in foreign-exchange markets.