Once decision makers fully adjust to an increase in the general price level,
a. the actual rate of unemployment will exceed the natural rate of unemployment.
b. the actual rate of unemployment will be less than the natural rate of unemployment.
c. the rate of output will exceed the economy's long-run capacity.
d. output will return to the full-employment level.
D
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Which of the following is TRUE with respect to specialization?
A) Adam Smith in The Wealth of Nations referred to specialization and division of labor. B) With a given set of resources, specialization results in higher output. C) Individuals and nations specialize in their areas of comparative advantage in order to reap the gains of specialization. D) All of the above are correct.
Unemployment compensation payments:
a. rise during a recession and thus reduce the severity of the recession. b. rise during a recession and thus increase the severity of the recession. c. rise during inflationary episodes and thus reduce the severity of the inflation. d. fall during a recession and thus increase the severity of the recession.
Wage elasticity of labor supply is a term referring to the
a. percentage change in wages demanded divided by the percentage change in wages supplied. b. percentage change in wages supplied divided by the percentage change in wages demanded. c. percentage change in wages divided by the percentage change in hours worked. d. percentage change in hours worked divided by the percentage change in wages.
If you believe that the economy can achieve full employment without inflation through tax reductions, spending cuts, and deregulation, you are a member in good standing in the
a. classical school b. Keynesian school c. neo-Keynesian school d. rational expectations school e. supply-side school