Both classicals and Keynesians agree that policymakers
A. can keep the unemployment rate permanently below the natural rate by permanently running a high rate of inflation.
B. cannot keep the unemployment rate permanently below the natural rate by permanently running a high rate of inflation.
C. cannot exploit the Phillips curve in the short run.
D. can exploit the Phillips curve in the short run.
Answer: B
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When a government moves from a centrally planned economy to a market economy, this is an example of ________ policy.
A. monetary B. structural C. aggregation D. fiscal
A currency drain ________ the amount of bank reserves available to banks to make loans because ________
A) reduces; people are holding more money outside of the banks B) increases; people are holding less money outside of the banks C) reduces; people are holding less money outside of the banks D) reduces the monetary base; people are holding more money outside of the banks E) reduces; people are holding onto the money the banks could have borrowed from the Fed
If producers believe that the increase in their relative prices is large relative to the increase in the general price level, then the slope of the short-run aggregate supply curve will be
A) infinite. B) small. C) large. D) negative.
Which of the following is most likely a topic of discussion in economics?
a. Families must decide whether to spend their money on a new car or a fancy vacation. b. Nations must choose whether to put more of the budget into police and fire protection or into the school system. c. Towns must choose whether to put more of the budget into police and fire protection or into national defense. d. Nations must decide whether to devote more funds to national defense or to police and fire protection.