Refer to Figure 17-4. Consider the shift in the short-run Phillips curves shown in the above graph. This shift may be explained by
A) an increase in the expected rate of inflation from 4.0 to 5.5 percent.
B) an increase in the natural rate of unemployment from 5.0 to 6.2 percent.
C) either an increase in the natural rate of unemployment from 5.0 to 6.2 percent or an increase in the expected rate of inflation from 4.0 to 5.5 percent.
D) None of the above is correct.
A
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The CPI is a useful index for all of the following reasons except
A. it is used to determine whether people's incomes are keeping up with the costs of the things they buy. B. it is used to measure changes in the cost of living. C. it used to measure the average price level of all final goods and services produced. D. it is used to compute the U.S. inflation rate.
The short-run aggregate supply curve is most likely to shift down (to the right) when actual output is:
A. not equal to potential output, regardless of whether it is above or below. B. less than potential output. C. equal to potential output. D. greater than potential output.
(Consider This) In 1975, McDonald's introduced its Egg McMuffin breakfast sandwich, which remains popular and profitable today. This longevity illustrates the idea of:
A. opportunity cost. B. upsloping supply. C. consumer sovereignty. D. specialization.
The demand curve shows the relationship between quantity demanded and
A. supply. B. price. C. quantity supplied. D. income.