Refer to Figure 17-2. Suppose the economy is at point B in the figure above. Which of the following is true?
A) The economy is producing at potential GDP.
B) The current unemployment rate is 5%.
C) Expected inflation and actual inflation are the same.
D) The expected rate of inflation is 3%.
E) The natural rate of unemployment is 3.8%.
D
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If the money supply is $250 billion and nominal GDP is $1 trillion, the velocity of money is:
a. 0.25. b. 0.40. c. 2.50. d. 4.00.
Suppose the market for home-grown peppers in the town of Smallville is comprised of two farmers. Suppose the two farmers try to collude. Explain why their collusion might not be successful
A firm is operating such that the marginal product of labor is 10 and the marginal product of capital is 20. The firm is minimizing its costs only if
A. the wage is half the rental rate. B. since capital is more productive than labor, the firm must be minimizing cost. C. the rental rate is half the wage. D. Given this information the firm can't be minimizing cost under any circumstances.
Goodland is currently operating at full capacity. The country experienced a sudden boom in economic activity. However, the unemployment rate increased soon afterwards. What is likely to have caused such a phenomenon?
What will be an ideal response?