According to Friedman and Phelps, the unemployment rate
a. is never below its natural rate.
b. is below its natural rate when actual inflation is greater than expected inflation.
c. is below its natural rate when actual inflation is less than expected inflation.
d. is below its natural rate when actual inflation equals expected inflation.
b
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When a country that imports shoes imposes a tariff on shoes, buyers of shoes in that country become worse off
a. True b. False Indicate whether the statement is true or false
Which of the following represents the basic principle of public choice theory?
A. Politicians act consistently in the public's interest. B. Politicians follow their own self-interest and seek to maximize their reelection chances, rather than promote the best interests of society. C. Politicians act in the public interest once they are elected, but follow their own self-interest and seek to maximize their reelection chances during a political campaign. D. Politicians have an incentive to be cost-conscious and creative because they face the same type of profit motive as producers.
Assume the government introduces a $0.50 per gallon tax on gasoline. Which of the following is true?
A. The quantity of cars manufactured by producers will increase. B. The quantity of subway and bus tickets sold is likely to increase. C. The quantity of gasoline sold is likely to increase. D. The quantity of cars sold is likely to increase.
The foreign purchases effect on aggregate demand suggests that a:
A. Fall in our domestic price level will increase our imports and reduce our exports, thereby reducing the net exports component of aggregate demand B. Fall in our domestic price level will decrease our imports and increase our exports, thereby reducing the net exports component of aggregate demand C. Rise in our domestic price level will increase our imports and reduce our exports, thereby reducing the net exports component of aggregate demand D. Rise in our domestic price level will decrease our imports and increase our exports, thereby reducing the net exports component of aggregate demand