Which of the following explains why the original Phillips curve relation disappeared or, as some economists have remarked, "broke down" in the 1970s?
A) Individuals assumed the expected price level for the current year would be equal to the actual price level from the previous year.
B) Individuals assumed that expected inflation would be zero
C) Individuals changed the way they formed expectations of inflation.
D) Monetary policy became contractionary.
E) More labor contracts became indexed to changes in inflation.
C
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The three central questions for efficient organizational design include all EXCEPT a. does the decision maker have the relevant information?
b. is the decision maker in a supervisory role? c. who is making the decision? d. does the decision maker have an incentive to make a good decision?
Production possibilities frontiers are typically concave (bowed out) from the origin because
a. of the law of supply b. there is usually a one-for-one trade-off in resources used in production c. economies of scale enable firms to reduce the average costs of production as output rises d. the opportunity cost of a good rises as the quantity of the good produced increases e. resources are often left idle in the firm