For this question, assume that expectations of P and A are correct. Now suppose that there is a 1% increase in A. Given this information, which of the following will occur?
A) a 1% increase in the real wage and a reduction in the natural rate of unemployment
B) a 1% increase in the real wage and no change in the natural rate of unemployment
C) no change in the real wage and an increase in the natural rate of unemployment
D) no change in the real wage and a reduction in the natural rate of unemployment
B
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Which aggregate expenditure categories are influenced by the level of real GDP?
A) investment and government expenditures on goods and services B) consumption and government expenditures on goods and services C) consumption and investment D) imports and exports E) consumption and imports
Which of the following statements about the economically efficient level of air pollution is correct?
A) The economically efficient level of pollution occurs where the marginal cost of pollution reduction equals the marginal social benefit of reduction. B) The economically efficient level of pollution occurs where total benefits of pollution reduction are maximized. C) The economically efficient level of pollution is zero. D) The economically efficient level of pollution occurs where all social costs equal all social benefits.