If the level of unemployment is below the natural rate of unemployment, it would be expected that: ...

If the level of unemployment is below the natural rate of unemployment, it would be expected that:
 a. the short-run Phillips curve will shift leftward, as inflationary expectations adjust.
  b. the inflation rate will increase.
 c. the inflation rate will decrease.
 d. the long-run Phillips curve will shift rightward, as inflationary expectations adjust.

Question 2

In this era of globalization, one of the main reasons why some countries have remained closed to the rest of the world is:
 a. the fact that their governments follow policies that explicitly work against economic integration.
  b. racial discrimination.
  c. the fact that their governments impose extremely high mortgage taxes.
  d. the establishment of minimum wages.
  e. the fact that they are too poor to trade anything with the rest of the world.

Question 3

The presence of negative externalities leads to a misallocation of societal resources because:
 a. whenever external costs are imposed on outside parties, the good should not be produced at all.
 b. less of the good than is ideal for society is produced.
 c. there are some costs associated with production that the producer fails to take into consideration.
 d. the government always intervenes in markets when negative externalities are present, and the government is inherently inefficient.

Question 4

If the short-run aggregate supply curve is shifting right:
 a. the short-run Phillips curve is shifting left.
  b. the short-run Phillips curve is shifting right.
  c. the long-run Phillips curve is shifting right.
  d. the long-run Phillips curve is shifting left.

Question 5

In its most basic form, globalization has existed ever since:
 a. the creation of the Internet, which enables people to sell their products overseas.
  b. the end of World War II.
  c. the creation of the International Monetary Fund (IMF), which establishes the rules for all countries to follow as they trade.
  d. the fall of the Berlin wall which marked the end of communism and thus, the beginning of truly global times.
  e. primitive societies began to engage in trade.

Question 6

Which of the following is an example of an externality?
 a. cigarette smoke that permeates an entire restaurant
 b. a flu shot that prevents a student from transmitting the virus
  c. a beautiful flower garden outside the county courthouse
 d. All of the above are examples of externalities.

Question 7

If the short-run aggregate supply curve is shifting left:
 a. the short-run Phillips curve is shifting left.
  b. the short-run Phillips curve is shifting right.
  c. the long-run Phillips curve is shifting right.
  d. the long-run Phillips curve is shifting left.

Question 8

Which of the following is not a defining characteristic of globalization?
 a. Increased cross-border flow of trade in goods
  b. Increased cross-border flow of trade in services
  c. Increased international mobility of information
  d. Increased frequency of wars
  e. Increased mobility of individuals across borders

Question 9

Golf course developers who buy the land around the golf course they build are attempting to:
 a. impose external costs on non-consenting third parties.
  b. internalize external benefits.
 c. turn a private good into a public good.
 d. internalize external costs.

Question 10

If inflationary expectations are stable and there is no current inflation, the short-run Phillips curve will intersect the long-run Phillips curve at:
 a. a 0 percent unemployment rate.
 b. a 2 percent unemployment rate.
 c. a 4 percent unemployment rate.
 d. the natural rate of unemployment.