According to the Phillips curve, policymakers could reduce both inflation and unemployment by
a. increasing the money supply.
b. increasing government expenditures.
c. raising taxes.
d. None of the above is correct.
d
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Paul's Plumbing is a small business that employs 12 people. Which of the following is most likely to be a fixed cost for Paul's Plumbing?
a. The tax and insurance payments on the property owned by the firm. b. The wages paid to the 12 employees. c. The payroll taxes on the wages of the 12 employees. d. The salary paid to Paul, who is the manager of the firm.
Assume that one firm in a perfectly competitive market adopts a technological innovation that enables it to produce at a lower cost per unit than competing firms in the short run. Which of the following statements is correct?
a. The innovating firm will earn above-normal profit in the long run. b. All the competing firms will be forced to exit the market in the long run. c. This is an example of a decreasing cost industry. d. Competing firms will need to adopt the new technology in the long run in order to survive. e. Only new firms entering the industry with new-technology plants will be able to compete with the innovating firm.