What short-run choice does the Phillips curve illustrate?
a. The choice between higher real wages and higher output
b. The choice between cyclical unemployment and frictional unemployment
c. The choice between a higher capital stock and inflation
d. The choice between higher output per capita and maintaining the natural rate of unemployment
e. The choice between unemployment and inflation
E
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People with savings often deposit their funds in a commercial bank, rather than investing them directly with business enterprises, in order to
A) avoid the problems associated with asymmetric information. B) earn the highest possible return for taking on the riskiest investments. C) avoid the problems associated with financial intermediation. D) All of the above are correct.
Max has allocated $100 toward meats for his barbecue. His budget line and an indifference map are shown in the above figure. Which of the following best describes Max's preferences?
A) d > b > e B) d = b = e C) a = b > c D) a = b > e