Suppose the GDP is in equilibrium at full employment and the MPC is .80. If government wants to increase its purchase of goods and services by $16 billion without changing equilibrium GDP, taxes should be:

The long-run Phillips curve is a horizontal line at the natural rate of unemployment

a. True b. False Indicate whether the statement is true or false

Some economists argue that competitive price-searcher markets are inefficient because

a. the firms earn economic profits in the long run. b. the firms' marginal costs and marginal revenues are not always equal. c. firms do not produce the output rate that would minimize their average total costs. d. barriers to entry are high.