If the price level does not fall or only falls very slowly, then the result will be a prolonged period of
A. inflation whenever supply increases.
B. production below potential GDP.
C. production above potential GDP.
D. rapid price increases when demand changes.
Answer: B
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The longer the unemployment rate remains above the natural rate, the higher the natural rate. This theory is known as historical analysis
a. True b. False Indicate whether the statement is true or false
If President Obama agrees with his economic advisers who advocate cutting the rate of unemployment to 3 percent and the rate of inflation to 2 percent, you know he
a. believes the Phillips curve represents his only options b. believes in the rational expectations theory c. is a Keynesian d. is a neo-Keynesian e. believes the Laffer curve has validity
A country has $40 billion of domestic investment and net capital outflows of -$20 billion. What is the country's saving?
a. -$60 billion b. -$20 billion c. $20 billion d. $60 billion
Refer to the information provided in Figure 2.5 below to answer the question(s) that follow.
Figure 2.5Refer to Figure 2.5. For this economy to move from Point A to Point B, ________ additional OLED TVs could be produced when the production of LCD TVs is reduced by 30.
A. exactly 20 B. more than 20 C. fewer than 20 D. exactly 90