The economy was in long-run equilibrium when aggregate demand increased. At this point in time, the expected inflation has started to adjust to the new higher actual inflation rate. According to the (Friedman) natural rate theory, this means the unemployment rate in the economy must currently be
A) decreasing.
B) increasing.
C) higher than it was in long-run equilibrium.
D) equal to what it was in long-run equilibrium.
E) There is not enough information to answer the question.
B
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In the case where interest rates are lower in Japan, which of the following is an example of a "carry trade"
a. Increase borrowing in the US, convert to Yuan and invest in financial assets in Japan b. Increase borrowing in Japan and invest in Japan c. Increase borrowing in Japan, convert to Dollars and invest in the US d. Increase borrowing in the US and invest in the US
A dividend is
a. a payment to the corporation's bondholders b. the same as the profit of the corporation c. a payment of a portion of the corporation's profits to the shareholders d. guaranteed if one has common stock e. the payment to each partner in a partnership form of business
An effective price floor must be set
A. either at or below the equilibrium price. B. at the equilibrium price. C. above the equilibrium price. D. below the equilibrium price.
Which of these pairs of concepts can be positively, as well as negatively, related?
A. The income of consumers and the demand for a product B. The price of a product and the quantity of that product demanded C. The price of a product and the demand for a complementary product D. The cost of resources required to make a product and its supply