Assume the analysis of Friedman and Phelps is correct, so that the following equation is valid: Unemployment rate = Natural rate of unemployment - a × (?ctual inflation - x). In this equation,
a. a is a parameter that measures how much actual inflation responds to expected inflation.
b. a = 0 at the point of intersection of the short-run and long-run Phillips curves.
c. x is the expected rate of inflation.
d. All of the above are correct.
c
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Suppose your bank pays you 4 percent interest per year on your savings account, so that $1,000 grows to $1,040 over a one-year period
If prices increase by 1 percent per year over that time, approximately how much real value do you gain by keeping $100 in the bank for a year? A) $0 B) $10 C) $30 D) $50
A defense for the assumption that consumers maximize is that
A) consumers never make mistakes. B) consumers do not consistently make the same mistakes. C) it allows for many possible outcomes. D) mistaken consumers may receive counseling from the government.
In a perfectly competitive industry, assume the short-run average total cost increases as the output of the industry expands. In the long run, the industry supply curve will:
a. first have a positive slope and then a negative slope. b. have a negative slope. c. be perfectly horizontal. d. be perfectly vertical. e. have a positive slope.
Which of the following statements is correct? a. Technological advances always lead to the permanent displacement of workers
b. In a growing and dynamic economy, jobs are constantly being destroyed and created. c. Without unemployment insurance, the average duration of unemployment would likely be longer. d. If there is a balance between demand and supply in the labor market, frictional employment must equal zero.