Discuss, using the Philips Curve, the effect of a policy aimed at lowering the inflation rate.
What will be an ideal response?
When policy makers decide the inflation rate is too high and needs to be lowered it will not only influence the purchasing power of money, but also the unemployment rate. The short-run Philips Curve shows that a decrease in the inflation rate will increase the unemployment rate. However, in the long-run the unemployment rate will move back to its natural level.
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A. Define the term "globalization."
b. Describe the benefits of globalization. c. Who is likely to oppose globalization and why? What will be an ideal response?
A fundamental principle in demand analysis is that a change in price leads to
A) a movement along the demand curve. B) a rightward shift of the demand curve. C) a leftward shift of the demand curve. D) a complementary movement on the supply curve.
The effect of unions tends to ____ output in the union sector and ____ output in the non-union sector
a. increase; increase. b. increase; decrease. c. decrease; increase. d. decrease; decrease.
Only two exchange rate regimes can be considered hard pegs. These are:
A. flexible exchange rates and currency boards. B. dollarization and managed floating. C. currency boards and dollarization. D. the gold standard and inflation targeting.