If there is a large and sudden but temporary increase in the price of oil, which way does the short-run Phillips curve shift? If the central bank does not respond what happens to inflation and the unemployment rate in the long run?
The short-run Phillips curve shifts right. Both the inflation rate and the unemployment rate return to their original values.
You might also like to view...
A debtor nation means a nation
A) whose imports exceeds its exports. B) whose current account is less than its capital account. C) who—through its history—has invested less in the rest of the world than other countries have invested in it. D) whose current lending to the rest of the world exceeds its borrowing from the rest of the world.
A given change in disposable income would have the greatest effect on consumption with which of the following marginal propensities to consume?
a. 0.4 b. 0.6 c. 0.8 d. 0.2
High transaction costs will tend to
a. reduce the number of mutually beneficial exchanges that occur. b. allow easier specialization according to the law of comparative advantage. c. increase the value created by exchanges in an economy. d. increase the number of mutually beneficial exchanges that occur.
Which of the following is correct?
a. Rent control and the minimum wage are both examples of price ceilings. b. Rent control is an example of a price ceiling, and the minimum wage is an example of a price floor. c. Rent control is an example of a price floor, and the minimum wage is an example of a price ceiling. d. Rent control and the minimum wage are both examples of price floors.