If wages and prices become extremely flexible ________
A) there is no trade off between inflation and unemployment
B) unemployment can hardly deviate from the natural rate
C) it becomes very difficult to differentiate the short-run from the long-run Phillips curve
D) all of the above
E) none of the above
D
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A decrease in the riskiness of corporate bonds will ________ the yield on corporate bonds and ________ the yield on Treasury securities, everything else held constant
A) increase; increase B) decrease; decrease C) increase; decrease D) decrease; increase
Ricardian Equivalence theory is based on the view that ________
A) the impact of a tax cut is felt primarily on domestic consumption spending B) households tend to take future events into account when engaging in economic decision-making C) the price of a commodity is negatively related to the quantity of that good demanded D) a trade-off exists between the use of monetary and fiscal policy in influencing the level of income
For a perfectly competitive firm, which of the following is NOT true?
A) The average revenue curve, the demand and the marginal revenue curves are identical. B) The total revenue curve begins at the origin and slopes upward as output increases. C) The slope of the total revenue curve is equal to the product price. D) The total revenue curve is horizontal.
The U.S. Bureau of Labor Statistics defines the unemployment rate as
a. The percentage of the population who are not working b. The percentage of people who are looking for their first job c. The percentage of workers who lose their jobs d. The percentage of the labor force not employed but actively seeking work in the past 4 weeks