To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change.
B. increase.
C. decrease.
D. either increase or decrease depending on the relative shifts of AD and AS.
Answer: C
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As the price level falls, the value of money falls
a. True b. False Indicate whether the statement is true or false
Refer to the accompanying table. As the firm increases the number of employees per day each day from 1 to 2, output increases by:Output Per DayNumber of Employees Per Day00331662994132716511
A. 33 units. B. 132 units. C. 99 units. D. 66 units.
When exchange rates are volatile:
A) firms are assured that they will be able to earn profits from currency swings. B) firms engage in more trade. C) trade and cross-border financial and labor flows are reduced as uncertainty and transaction costs take their toll. D) international economic activity is increased.
Refer to the information provided in Table 19.2 below to answer the question that follows.
Table 19.2 
Refer to Table 19.2. The tax rate structure in this example is
A. proportional. B. progressive. C. regressive. D. marginal.