When the economy enters into a recession, your employer is ________ to reduce your wages because ________
A) likely; aggregate demand is vertical in the long run
B) unlikely; lower wages reduce productivity and morale
C) likely; output prices always fall during recession
D) unlikely; output and input prices generally fall during recession
B
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One reason why, in the last four decades, the number of new auto makers in the world has been very small compared to the past is that
A) governments restrict who can produce automobiles. B) new auto makers cannot obtain necessary inputs to produce new cars. C) new producers cannot match the economies of scale of existing auto makers. D) the automobile cannot be improved upon in any way by new producers.
Unlike the Kyoto Protocol, the Copenhagen Accord will:
a. include India and China as participants. b. strongly curtail emissions. c. seek to reverse global warming d. be noncontroversial.
The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
Suppose that at the beginning of a loan contract, the real interest rate is 4% and expected inflation is currently 6%. If actual inflation turns out to be 7% over the loan contract period, then
A) lenders gain 3% of the loan value. B) borrowers lose 3% of the loan value. C) lenders gain 1% of the loan value. D) borrowers gain 1% of the loan value.