If the economy is at Point A in the Phillips curve graph shown, in the long run, the unemployment would be expected to:
A. decrease.
B. immediately fall to zero.
C. increase.
D. remain constant.
Answer: C
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A characteristic of monopolistic competition is
A) product differentiation. B) a high capital-output ratio. C) a low ratio of fixed costs to variable costs. D) the absence of advertising.
Explain how price expectations can affect the supply of a product
What will be an ideal response?
Suppose that the nominal exchange rate between the U.S. dollar and the Mexican peso is 0.10 dollars per peso. If Mexico's inflation is 10 percent and the United States' inflation is 0 percent, from the U.S. point of view, the real exchange rate
A) appreciates to 0.11 dollars per peso. B) depreciates to 0.11 dollars per peso. C) appreciates to 0.09 dollars per peso. D) depreciates to 0.09 dollars per peso. E) appreciates to 0.2 dollars per peso.
When the demand for alternative investments decreases, the market for a particular bond adjusts by
a. having the supply of that bond increase. b. having the supply of that bond decrease. c. having the demand for that bond increase. d. having the demand for that bond decrease.