According to the long-run Phillips curve, which of the following is true?
(a) Unemployment increases with an increase in inflation
(b) Unemployment decreases with an increase in inflation
(c) Increased automation will lead to lower levels of structural unemployment in the long run
(d) Changes in the composition of the overall demand for labor tend to be deflationary in the long run
(e) The natural rate of unemployment is independent of monetary and fiscal policy changes that affect aggregate demand
Ans: (e) The natural rate of unemployment is independent of monetary and fiscal policy changes that affect aggregate demand
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The entry of new firms into an industry will very likely
A. shift the industry supply curve to the right. B. cause the market price to fall. C. reduce the profits of existing firms in the industry. D. All of the responses are correct.
Given that energy is an input in production, the development of a cheaper source of energy will result in:
a. a lower price level and a lower amount of production. b. a higher price level and a higher amount of production. c. a lower amount of production at every price level. d. a higher amount of production at every price level. e. a lower profit at every price level.
Which of the following in not a reason that a lump-sum tax imposes a minimal administrative burden on taxpayers?
a. Everyone can easily compute the amount of tax owed. b. There is no benefit to hiring an accountant to do your taxes. c. Everyone owes the same amount of tax, regardless of earnings. d. The government can easily forecast tax revenues.
The demand curve that a monopolist faces is:
A. the market demand curve. B. the same as the demand curve that faces a perfectly competitive firm. C. not affected by changes in the prices of other goods. D. generally flatter than the demand curve that faces a perfectly competitive firm.