The Phillips curve trade-off relationship implies that
A. the government can fine-tune the economy and pick the most preferred combination of unemployment and inflation.
B. there is no relationship between inflation and unemployment, at least in the long run.
C. low unemployment can be obtained only by generating rapidly increasing inflation.
D. the government can fine-tune the economy and generate both the natural rate of unemployment and zero inflation.
Answer: A
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A firm that wishes to maximize profits will continue to hire labor until the
A) real wage = MPL. B) nominal wage = MPL. C) nominal wage = the real wage. D) nominal wage = the price level.
Last year, 1,000 cases of cough syrup were sold at $10; this year, 1,200 cases were sold at $12 . The most probable interpretation of these data is that the
a. supply and demand curves are shifting to the right. b. supply and demand curves are shifting to the left. c. supply curve has shifted to the left, with no change in demand. d. demand curve has shifted to the right, with no change in supply.
Which of the following depository institutions is NOT regulated by a government agency?
A. credit unions B. savings and loan associations C. commercial banks that are not part of the Federal Reserve System D. None of these: All depository institutions are regulated by some government agency.
Mark has two job offers when he graduates from college. Mark views the offers as identical, except for the salary terms. The first offer is at a fixed annual salary of $50,000. The second offer is at a fixed salary of $20,000 plus a possible bonus of $60,000. Mark believes that he has a 50-50 chance of earning the bonus. If Mark takes the offer that maximizes his expected utility and is risk-neutral, which job offer will he choose?
A. Mark will take the first offer. B. Mark will take the second offer. C. Mark is indifferent between the offers-both yield the same expected utility. D. Indeterminate from the given information.