The natural rate hypothesis concludes that when the inflation rate increases, then in the long run there is
A) an upward movement along the short-run Phillips curve.
B) an upward shift of the short-run Phillips curve.
C) a downward shift of the short-run Phillips curve.
D) no change at all in the short-run Phillips curve.
E) a downward movement along the short-run Phillips curve.
B
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A market equilibrium is only efficient if:
A. the consumer surplus and the producer surplus associated with a given transaction are equal. B. output is distributed equitably among consumers. C. consumer surplus and producer surplus are both zero. D. all relevant costs and benefits are reflected in the market supply and demand curves.
In order to support an undervalued euro, the European Central Bank must ________ dollars. Over time, this action will cause the rate of inflation in the EU to ________
A) buy; increase B) sell; increase C) buy; decrease D) sell; decrease
During a financial crisis the possibility of bank failures rose. An increase in the likelihood of a bank failing shifts demand for its stock
A. right, so the price rises. B. left, so the price rises. C. right, so the price falls. D. left, so the price falls.
A tariff is a
A. subsidy to workers harmed by U.S. trade with foreign countries. B. limit on the quantities of a good that can be imported each year. C. tax on exports that tends to make them cheaper for foreigners to buy. D. tax on imports that raises their prices and makes them less attractive to domestic consumers.