If everyone in the economy correctly anticipates the inflation rate, the unemployment rate
A) will be the natural rate of unemployment.
B) will be the cyclical rate of unemployment.
C) will be inversely related to the expected inflation rate.
D) will be positively related to the expected inflation rate.
Answer: A) will be the natural rate of unemployment.
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In an eight-hour day, Andy can produce either 24 loaves of bread or 8 pounds of butter. In an eight-hour day, Bob can produce either 8 loaves of bread or 8 pounds of butter. Andy has a comparative advantage in the production of
A) bread, while Bob has a comparative advantage in the production of butter. B) butter, while Bob has a comparative advantage in the production of bread. C) bread and neither has a comparative advantage in the production of butter. D) both bread and butter.
As compared to the basic Nash-Cournot equilibrium for duopolists where the firms face the same market demand curve and have identical costs, in the situation where the firms produce products which are viewed by consumers as not being identical,
A) there will generally be different prices charged by the two firms. B) there will generally be different quantities produced by the two firms. C) one or both of the firms may practice spurious differentiation. D) All of the above.