Suppose a central bank takes actions that will lead to a higher inflation rate. The public, however, is slow to adjust its expectation of inflation. Then, in the short run, unemployment
a. rises. As inflation expectations adjust, the short-run Phillips curve shifts right.
b. rises. As inflation expectations adjust, the short-run Phillips curve shifts left.
c. falls. As inflation expectations adjust, the short-run Phillips curve shifts right.
d. falls. As inflation expectations adjust, the short-run Phillips curve shifts left.
c
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According to Keynes, the "stickiness" of wage rates could best be explained by
A) short-term labor contracts. B) minimum wage laws. C) unions and long-term labor contracts. D) government interference.
How much would Samantha be willing to pay for the insurance?
a. $1000 b. $1100 c. $2500 d. $2600
Berto is trying to decide between buying a mid-sized car and a pickup truck. To make this decision rationally, he should ______ the marginal utilities generated by the two, as well as their prices.
a. anchor b. compare c. multiply d. frame
Answer the following questions true (T) or false (F)
1. Externalities always arise because of a failure of transferability. 2. The capitalized value of a constant stream of $20 per year given an interest rate of 4% per year is $800. 3. The prior appropriation doctrine is a system in which individuals have rights to specific quantities of water and these right can be sold to others.