According to the new classical school, an expected increase in government spending is associated with:
a. a downward movement along the long-run Phillips curve.
b. an upward movement along the short-run Phillips curve.
c. a parallel outward shift of the long-run Phillips curve.
d. an upward movement along the long-run Phillips curve.
e. a downward shift of the short-run Phillips curve.
d
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If a government policy change harms a monopolist, the government could
A) tax those who get additional gains and compensate the monopolist, thereby making the change a Pareto improvement. B) increase the general tax rate and compensate the monopolist, thereby making the change a Pareto improvement. C) do nothing, because the change is a Pareto improvement. D) It is not possible to mitigate the harm to a monopolist.
Exhibit 21-1 Production possibilities curves
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In Exhibit 21-1, the production possibilities curves of wheat and corn for Nabia and Pada are presented. If both countries specialize in one good and trade for the other, :
A. Nabia and Pada will be able to consume at a point to the right of their respective production possibilities curves. B. Nabia will be able to consume, at the most, the combination represented by point A. C. Pada will be able to consume, at the most, the combination represented by point B. D. the citizens of Nabia will consume only corn and the citizens of Pada will consume only wheat.