13 Suppose that increased international trade makes product

13. Suppose that increased international trade makes product markets more competitive in the U.S. Given this information, we would expect to observe which of the following? A) an upward shift in the WS curve B) a downward shift in the WS curve C) an upward shift in the PS curve D) a downward shift in the PS curve E) none of the above 14. Based on our understanding of the labor market model presented in Chapter 6, we know that a reduction in the markup will cause A) an increase in the equilibrium real wage B) a reduction in the equilibrium real wage C) an increase in the natural rate of unemployment. D) a reduction in the natural rate of unemployment and no change in the real wage. 15. In the Phillips curve equation, which of the following will cause an increase in the current inflation rate? A) an increase in the expected inflation rate B) a reduction in the unemployment rate C) an increase in the markup, m D) all of the above E) none of the above 16. For this question, assume that the Phillips curve equation is represented by the following equation ?t-mt-1 . (m + z)-aut. A reduction in the unemployment rate will cause A) a reduction in the markup over labor costs(i.e., a reduction in m). B) an increase in the markup over labor costs. C) an increase in the inflation rate over time. D) a decrease in the inflation rate over time. E) none of the above 17. For this question, assume that the expected rate of inflation is a function of past year\'s inflation. Also assume that the unemployment rate has greater than the natural rate of unemployment for a number of years. Given this information, we know that A) the rate of inflation will approximately be equal to zero. B) the rate of inflation should neither increase nor decrease. C) the rate of inflation should steadily increase over time D) the rate of inflation should steadily decrease. E) the inflation rate will be approximately equal to the natural rate of unemployment.

Solution

ans 13 option c is correct

ans 14 option c is correct

ans 15 option d is correct

ans 16 option c is correct

ans 17 option b is correct