In the above figure, what factor might have caused the shift in the short-run Phillips curve from SRPC1 to SRPC2?
What will be an ideal response?
The long-run Phillips curve did not shift. Therefore the factor that shifted the short-run Phillips curve was an increase in the expected inflation rate.
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A surplus means a(n):
a. excess demand for this product. b. situation where the current market price is too low. c. situation where the quantity demanded exceeds the quantity supplied. d. situation where the quantity supplied is less than the quantity demanded. e. excess supply of the product at the current price.
Lorrie will receive a nominal wage increase of 10 percent this year. The inflation rate was 5 percent last year and is predicted to be 8 percent this year. If the economic forecast is correct, her real wage this year
a. will increase by approximately 2 percent b. will increase by approximately 8 percent c. will increase by approximately 5 percent d. will remain the same e. cannot be calculated without knowing the number of dollars by which her wage increases
Sound macroeconomic policies are less important than industrial policies in promoting growth
Indicate whether the statement is true or false
Assume that the technology coefficient is equal to 0.40. If this production function is graphed with Real GDP on the vertical axis and labor on the horizontal axis, the resulting graph would be