In the classical model, an increase in the unemployment rate
A) will result in an increase in the price level if the reduction in output is caused by a change in aggregate demand.
B) will likely be temporary.
C) is a signal of demand-pull inflation.
D) will persist when the reduction in output is caused by a reduction in aggregate demand.
B
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The authors note that the goal of maximizing the market value of the firm may be more appropriate than maximizing short-run profits because:
A) the market value of the firm is based on long-run profits. B) managers will not focus on increasing short-run profits at the expense of long-run profits. C) this would more closely align the interests of owners and managers. D) all of the above
The use of a tariff provides monopoly protection since
A) it allows more imports into the country. B) it reduces competition from imports by raising the import price. C) it reduces exporters' profits. D) it expands tax credits.