In the long run, the unemployment rate is independent of inflation, and the Phillips curve is vertical at the natural rate of unemployment.
Answer the following statement true (T) or false (F)
True
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Economies can be organizations such as
A) households. B) individual states of the United States. C) entire countries. D) households, states, and countries.
From an initial long-run macroeconomic equilibrium, if the Federal Reserve anticipated that next year aggregate demand would grow significantly faster than long-run aggregate supply, then the Federal Reserve would most likely
A) increase interest rates. B) increase income tax rates. C) decrease income tax rates. D) decrease interest rates.
In terms of unemployment, hysteresis models try to explain why
a. cyclical unemployment is always present. b. structural unemployment cannot be eradicated. c. high unemployment persists even after its initial cause is long past. d. frictional unemployment is the cause of hysteresis.
If the top personal tax rate is higher than the top corporate rate, high income taxpayers have an incentive to _____
a. incorporate b. save c. engage in tax evasion d. purchase stock