Q1: A study of the frequency of price changes for commonly purchased items found that ____ products tend to change price frequently and that _____ product prices change less frequently.

commodity; catalog

Q2 : In the short run, a contractionary supply shock causes the average price level to _____ and the total output level to:

rise; fall.

rise; rise.

fall; fall.

fall; rise.

Q3: Econia's unemployment rate is 2%, and its natural rate of unemployment is 4.5%. Which of the following describes a way that Econia's economy could return to its natural rate of unemployment?

The government might reduce taxes to increase the purchasing power of consumers.

Over time, wages will rise, which causes the costs of production to rise and output to fall.

The government might increase the money supply to stimulate the economy.

Over time, the wage rates will drop, which causes workers to drop out of the labor force.

processed food; commodity

catalog; laundromat

laundromat; processed food

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