If people expect economic fluctuations to be permanent and caused primarily by supply-side shifts, then the result is likely to be a positive relationship between the inflation rate and the unemployment rate

a. True
b. False
Indicate whether the statement is true or false


True

Economics

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The firm in the figure above is in monopolistic competition. It will produce

A) 10 units. B) 20 units. C) 30 units. D) 40 units.

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The consumer's optimum choice is represented by

a. MUx/MUy = Px/Py. b. MUx/Px = MUy/Py. c. MRSxy = Px/Py. d. All of the above are correct.

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The SRAS curve is upward sloping, there is a liquidity trap, and investment spending is sensitive to changes in the interest rate. According to the monetarist transmission mechanism, if the money supply increases the AD curve __________ and the price level __________

A) does not change; does not change B) shifts to the left; falls C) shifts to the right; rises D) does not change; rises E) none of the above

Economics