If actual inflation is correctly expected and built into people's wage and price-setting decisions, the Phillips curve:
A. remains a downward sloping line.
B. becomes a vertical line.
C. becomes an upward sloping line.
D. becomes a horizontal line.
Answer: B
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Suppose that Dave has $200 to spend per week and he buys only magazines and pizza. The price of a pizza is $10 and the price of a magazine is $5. If Dave buys 20 magazines per week, which of the following amount of pizza is not affordable to him?
A) 10 B) 20 C) 9 D) All of the above answers are correct because none of the listed amounts of pizza are affordable.
The real-balance effect implies that when
A) the price level decreases, the value of money balances held by individuals, firms, government, and foreigners increases and spending decreases. B) the price level increases, the value of money balances held by individuals, firms, government, and foreigners increases and spending increases. C) the price level increases, the value of money balances held by individuals, firms, government, and foreigners decreases and spending decreases. D) the price level decreases, the value of money balances held by individuals, firms, government, and foreigners decreases and spending decreases.
The poorest 20 percent of the U.S. population received approximately ____ of total income
a. 5 percent b. 10 percent c. 15 percent d. 20 percent
Which point shows where the United States economy was operating during the low point of the Great Depression?
A. Point A
B. Point B
C. Point C
D. Point D