Unanticipated deflation can create unemployment if
A) nominal wages are sticky, causing real wages to rise over time.
B) nominal wages are flexible, causing people's real incomes to decline.
C) banks refuse to make loans at low nominal interest rates.
D) nominal interest rates remain positive.
A
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Suppose the current inflation rate and the expected inflation rate are both 3 percent. The current unemployment rate and the natural rate of unemployment are both 4 percent
Use a Phillips curve graph to show the effect on the economy of a severe supply shock. If the Federal Reserve keeps monetary policy unchanged, what will eventually happen to the unemployment rate? Show this on your Phillips curve graph.
If a commercial bank has assets valued at $200 million and a net worth of $20 million, what is the value of the bank's liabilities?
a. There is not enough information to determine. b. $20 million c. $220 million d. $180 million e. $200 million
If Harry Bartolini's Ford dealership sells Rosa Brown a new automobile for $30,000, economic analysis indicates that
What will be an ideal response?
The relationship between price and quantity demanded, ceteris paribus, is
A. quantity supplied. B. demand. C. supply. D. equilibrium.