Refer to Figure 17-2. Suppose the economy is at point C in the figure above. If workers adjust their expectations of inflation, which of the following will be true?
A) Workers and firms expect inflation to be 1%.
B) The short-run Phillips curve will shift to the right.
C) The natural rate of unemployment is 6%.
D) The economy will move from C to A.
E) The short-run Phillips curve will shift to the left.
E
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The social interest theory of regulation suggests that the political process and regulations will ________ and the capture theory of regulation suggests that the political process and regulations will ________
A) seek to minimize deadweight loss; serve the interests of the producers B) try to maximize the producers' economic profits; seek to minimize deadweight loss C) be unaffected by deadweight loss; increase the firms economic profits D) ignore producers' interests and concentrate on consumers' interests; seek to minimize firms' economic profits
Evaluate the following statements: I. The slope of the demand curve is always equal to the elasticity of demand. II. Moving down along a downward-sloping, straight-line demand curve, the elasticity of demand falls
a. (I) and (II) are both true. b. (I) is true and (II) is false. c. (I) is false and (II) is true. d. (I) and (II) are both false.