From 1994 to 1999, inflation in the United States was relatively constant at approximately 2.5 percent. When inflation is constant for an extended period, which of the following is most likely?
a. People will correctly anticipate the actual inflation rate, and the actual rate of unemployment will approach the natural rate of unemployment.
b. People will correctly anticipate the actual inflation rate, and the actual rate of unemployment will exceed the natural rate of unemployment.
c. The actual inflation rate will be greater than the anticipated rate, leading to an actual rate of unemployment that exceeds the natural rate of unemployment.
d. Actual inflation will be less than the anticipated rate, leading to an actual rate of unemployment that exceeds the natural rate of unemployment.
A
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A perfectly competitive firm earns an economic profit when:
a. price is above average variable cost. b. price is above average total cost. c. total cost exceeds total revenue. d. total variable cost exceeds total revenue.
Technological change allows the economy to produce more output with the same amount of capital and labor
Indicate whether the statement is true or false