Other things remaining the same, a fall in the price of peanuts ...

[nelaaney]

Other things remaining the same, a fall in the price of peanuts will ________.
 
  A. increase the supply of peanuts
  B. decrease the supply of peanut butter
  C. decrease the quantity supplied of peanuts
  D. decrease the supply of peanuts

Question 2

Suppose that last year the unemployment rate was 5 percent and the inflation rate was 2.5 percent. If the natural rate of unemployment is 5 percent, how do you expect inflation to change?
 
  What will be an ideal response?

[helenmarkerine]

Answer to Question 1

C A fall in the price of the good creates a movement along the supply curve and decreases the quantity supplied.

Answer to Question 2

Inflation is stable when the unemployment rate is equal to the natural rate of unemployment. Since last year's unemployment rate was equal to the natural rate of unemployment, the inflation rate should not change.

[nelaaney]

TYSM

[xoxo123]

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