The modern view of the Phillips curve suggests that
a. when inflation is less than anticipated, unemployment will rise above the natural rate.
b. monetary policy will be unable to affect inflation.
c. when people accurately anticipate inflation, expansionary monetary policy will reduce unemployment.
d. when inflation exceeds what was anticipated, the natural rate of unemployment will rise.
A
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Government policies such as price controls, rent controls, and quantity restrictions have the effect of
A. creating excess quantities demanded or excess quantities supplied. B. pushing prices to market clearing levels more rapidly than private market forces. C. promoting the attainment of an unhindered market equilibrium. D. allowing quantity demanded to adjust to equality with aggregate supply.
The production of information products is characterized by
A. relatively low fixed cost. B. diseconomies of operation. C. relatively low marginal cost. D. an upward sloping marginal cost curve.
Charging a polluter a fee for each unit of pollution released is an example of
a. the market approach to environmental policy b. the polluter-pays principle c. the command-and-control approach to environmental policy d. (a) and (b) only
If a 4 percent change in the price of a good leads to a 3 percent change in quantity demanded, the price elasticity of demand equals
A) 1.33. B) 0.75. C) 4.00. D) 3.44. E) None of the above answers is correct.