The intent of indexing is to
a. raise tax revenue automatically during inflation.
b. shift the short-run Phillips curve to the right.
c. take most of the sting out of inflation.
d. reduce inflation gradually.
c
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Suppose that households and businesses increase autonomous expenditures, driving output well above potential. Describe, in detail, how monetary policy might react to minimize the increase in inflation
What will be an ideal response?
The following are properties of the logarithm function with the exception of
A) ln(1/ x) = -ln(x). B) ln(a + x) = ln(a) + ln(x). C) ln(ax) = ln(a) + ln(x). D) ln(xa) a ln(x).
If the current unemployment rate is less than the natural unemployment rate, then the economy is
A) in long-run equilibrium. B) in an inflationary gap. C) in a recessionary gap. D) producing at full employment. E) b and d
If the market price of a product falls and as a result total revenue of firms falls, we can conclude that
A. demand is inelastic in this price range. B. the product's price is above the midpoint of its demand curve. C. the demand curve is horizontal. D. demand is elastic in this price range.