If the long-run Phillips curve is vertical, then any government policy designed to lower:
A. unemployment will not change the unemployment rate and only increase the inflation rate.
B. unemployment will work leaving the inflation rate unchanged.
C. inflation will cause employment to rise.
D. unemployment will work causing the inflation rate to fall.
Answer: A
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The productivity speed-up of the 1950s and the 1960s could have been caused by
a. wartime innovations. b. civilian innovations after World War II. c. industrial innovations spurred by the Korean and Vietnam conflicts. d. decreases in the rate of population growth.
Total revenue will be at its largest value on a linear demand curve at the
a. top of the curve, where prices are highest. b. midpoint of the curve. c. low end of the curve, where quantity demanded is highest. d. None of the above is correct.
Appreciation of the British pound will
A. make Britain's exports less expensive and her imports more expensive. B. make Britain's exports more expensive and her imports less expensive. C. make Britain's exports and imports both more expensive. D. make Britain's exports and imports both less expensive.
Starting from long-run equilibrium, an increase in autonomous investment results in ________ output in the short run and ________ output in the long run.
A. lower; potential B. higher; higher C. lower; higher D. higher; potential