Some countries have had relatively high inflation and relatively high unemployment for long periods of time. Is this consistent with the Phillips curve? Defend your answer
They are consistent with the long-run Phillips curve. In the long run the natural rate of unemployment is determined by factors other than inflation. For example, the natural rate of unemployment will be higher in a country with a higher minimum wage and more generous unemployment compensation. In the long run, inflation depends on the growth rate of the money supply. So, it is possible for a country with a Phillips curve that is farther to the right to also have greater money supply growth and higher inflation.
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Which of the following is the best example of a natural monopoly?
A) ownership of the only ferry across Puget Sound for twenty miles B) the United States Postal Service C) the cable television company in your hometown D) owning the only licensed taxicab in town E) producing a patented drug
Real income is equal to ________ and a relative price is given by ________
A) the dollar amount of income divided by the dollar price of a good; the dollar price of one good divided by the dollar price of the good whose relative price is being calculated B) the dollar price of one good divided by the dollar price of the good whose relative price is being calculated; the dollar amount of income divided by the dollar price of a good C) The dollar price of one good divided by the dollar price of another good; the dollar price of one good divided by the dollar price of the good whose relative price is being calculated D) the dollar amount of income; real income divided by the dollar amount of income
Commercial bank ownership of corporate stock is prohibited by regulators in
A) the United States. B) the United Kingdom. C) Germany. D) Japan.
Stagflation refers to a situation in which the economy is experiencing:
A. high economic growth and high inflation. B. low economic growth and high inflation. C. high economic growth and low inflation. D. low economic growth and low inflation.