If the public correctly perceives that the central bank will reduce inflation, then
a. the short-run Phillips curve shifts right, and the sacrifice ratio will be higher.
b. the short-run Phillips curve shifts right, and the sacrifice ratio will be lower.
c. the short-run Phillips curve shifts left, and the sacrifice ratio will be higher.
d. the short-run Phillips curve shifts left, and the sacrifice ratio will be lower.
d
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While waiting in line to buy one cheeseburger for $1.50 and a medium drink for $1.00, Sally notices that she could get a value meal that contains both the cheeseburger and medium drink and also a medium order of fries for $2.75 . She thinks to herself, "Is it worth the extra 25 cents to get the medium fries?" To an economist, Sally's decision is an example of:
a. marginal analysis. b. basing decisions on total, rather than marginal, value. c. an unintended consequence. d. the fallacy of composition.
When G = T the government is running a budget deficit
Indicate whether the statement is true or false
The aggregate supply curve is drawn with
a. the price level on the vertical axis and nominal GDP on the horizontal. b. nominal GDP on the vertical axis and real GDP on the horizontal. c. the price level on the vertical axis and real GDP on the horizontal. d. real GDP on the horizontal and the rate of inflation on the vertical.
Democracy tends to best promote economic freedom when there is
a. checks on the power of both the executive and legislative majorities. b. constitutional protection of private property rights. c. political decentralization. d. all of the above.