Ross is looking at a graph that shows the relation between inflation and unemployment. The graph measures the rate of inflation along the y-axis and the rate of unemployment along the x-axis. Among the points he observes on the graph (with y as the first value and x as the second) are (5, 4), (4, 4), (2, 4), and (1, 4). Ross is looking at a graph that shows a _____
a. short-run Phillips curve
b. long-run Phillips curve
c. short-run aggregate supply curve
d. long-run aggregate supply curve
b
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According to the simple circular flow concept, whenever planned investment is greater than planned saving during periods of full employment, there is a tendency for
a. output to rise. b. prices to rise. c. employment to increase. d. government to regulate prices and wages.
In order to build a table, a furniture company buys $50 worth of wood from a lumber company and $20 worth of hardware from a metal products firm. If the value added by the furniture company is $200, what price would the table sell for according to the value added approach to GDP?
a. $130 b. $150 c. $180 d. $200 e. $270
If the supply of a factor is perfectly inelastic, then
A) no more than the existing quantity can be supplied. B) the supply curve is horizontal. C) sellers will provide whatever quantity is demanded at the going price. D) a fall in price results in no quantity being supplied.
Research on the effects of recessions on the real level of GDP shows that
A) recessions cause only temporary reductions in real GDP, which are offset by growth during the expansion phase. B) recessions cause large, permanent reductions in the real level of GDP. C) recessions cause both temporary and permanent declines in real GDP, but most of the decline is temporary. D) recessions cause both temporary and permanent declines in real GDP, but most of the decline is permanent.