The modern view of the Phillips curve suggests that
a. when inflation is less than anticipated, unemployment will fall below the natural rate.
b. when inflation is steady, actual unemployment will equal the natural rate of unemployment.
c. systematic demand stimulus policies will be unable to affect prices in the long run.
d. there will be a trade-off between inflation and unemployment in the long run.
B
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Which of the following is not an effective technique for alleviating scarcity?
A) Developing additional resources B) Reducing prices C) Reducing wants D) Substituting intelligently among available goods
If workers sit idly by for a portion of their workday, but are still employed, firms may be engaged in ________
A) intertemporal substitution B) voluntary unemployment C) labor hoarding D) real business
Substitution bias
a. is one factor that causes the Consumer Price Index to underestimate the inflation rate b. is caused by the poor quality of many products c. is one of the primary causes of inflation d. involves consumer behavior that helps explain why the Consumer Price Index overestimates the inflation rate e. suggests most economists substitute other price indices for the flawed Consumer Price Index
Westland and Oceania have just started to trade with each other. Westland exports goods produced with skilled labor and imports goods made with unskilled labor from Oceania. Over time, we would expect that in Oceania the wages of unskilled workers will
a. rise, and the wages of skilled labor will fall. b. fall, and the wages of skilled labor will rise. c. rise, and the wages of skilled labor will rise. d. fall, and the wages of skilled labor will fall.