The natural level of output is the level of output that occurs when
A) the goods market and financial markets are in equilibrium.
B) the economy is operating at the unemployment rate consistent with both the wage-setting and price-setting equations.
C) the markup (m) is zero.
D) the unemployment rate is zero.
E) there are no discouraged workers in the economy.
B
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
Refer to the scenario above. Which of the following will hold true if Elly is known to be vengeful?
A) A Nash equilibrium will occur. B) Multiple equilibria will occur. C) There will be no Nash equilibrium. D) A socially inefficient equilibrium will occur.
Mutually beneficial trade will occur between two countries for all of the following reasons except one. Which is the exception?
a. The opportunity costs of producing two goods differs between the two trading partners. b. One country is more productive than the other. c. One country is more efficient than the other. d. One country has an absolute advantage over the other. e. Each country has a comparative advantage in producing some good.
Suppose that apples and bananas both cost the same, but the marginal utility of bananas is twice as high as that for apples. The consumer should purchase more bananas and fewer apples in order to maximize utility
a. True b. False Indicate whether the statement is true or false