The natural rate hypothesis argues that the economy will:
a. self-correct to the natural rate of inflation.
b. require expansionary fiscal policy to reach the natural rate of unemployment.
c. self-correct to the natural rate of unemployment.
d. require expansionary monetary policy to reach the natural rate of unemployment.
c
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The Fed engages in open market operations and sells government securities. The result is
A) lower interest rates. B) higher interest rates. C) interest rates remain unchanged since there is no reason to think bond prices changed. D) uncertain since more information is needed.
The first law of demand states that
a. the quantity demanded increases as price falls b. the quantity demanded decreases as price falls c. the quantity demanded increases as price increases d. none of the above
The goal of the consumer price index is to measure changes in the
a. costs of production. b. cost of living. c. relative prices of consumer goods. d. production of consumer goods.
How can the economy of China be characterized?
a. free market b. centrally planned c. mixed, but on the side of centrally planned d. mixed, but on the side of free market