The inflation rate has been constant for several years at 4 percent, and the unemployment rate has been stable at 6 percent over the same time period. Changes in government policy that cause the inflation rate to rise to 6 percent will
A) have no effect on the unemployment rate.
B) cause the unemployment rate to fall in the short run.
C) cause the unemployment rate to rise to 9 percent in the short run.
D) cause the unemployment rate to rise in the short run, but we cannot tell by how much.
Ans: B) cause the unemployment rate to fall in the short run.
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The above table shows the marginal benefits and costs from production of fertilizer. There are no external benefits. If the market is perfectly competitive and unregulated, at the equilibrium level of output,
A) resource allocation is efficient. B) resource allocation is inefficient. C) too few tons of fertilizer are produced. D) consumers must pay too high a price for fertilizer.
A negative cross elasticity indicates that two goods are complements
a. True b. False Indicate whether the statement is true or false