If the central bank raises the rate at which it increases the money supply, then in the short run unemployment is
a. above its natural rate. The short-run Phillips curve shifts right as the economy moves back to its natural rate of unemployment.
b. above its natural rate. The long-run Phillips curve shifts left as the economy moves back to its natural rate of unemployment.
c. below its natural rate. The short-run Phillips curve shifts right as the economy moves back to its natural rate of unemployment.
d. below its natural rate. The long-run Phillips curve shifts left as the economy moves back to its natural rate of unemployment.
c
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In the long run, the price level adjusts
A) to achieve money market equilibrium. B) so that the inflation rate equals the growth rate of real GDP. C) so that the inflation rate equals zero. D) so that the inflation rate is moderate. E) so that the real interest rate equals the nominal interest rate.
If a corporation retains all its profits and distributes none of the profit to owners, how can owners benefit?
A) If the retained earnings are expected to create future profits, the market price of the firm's stock will increase and create a capital gain for stockholders if the stock is sold. B) Shares of stock can be converted into bonds so stockholders will be able to earn coupon payments. C) Owners will benefit by changing the board of directors. D) Owners will only benefit if some profits are paid out in the form of dividends.
Refer to Table 13-4. At Victoria's profit-maximizing output
A) total revenue equals $24 and total cost equals $20. B) profit equals $2. C) total revenue equals $21 and total cost equals $17. D) total revenue equals $25 and total cost equals $22.
According to new Keynesian theory, if policy is correctly anticipated, increases in aggregate demand will stimulate the economy to higher levels of Real GDP and lower levels of unemployment in
A) the short run or the long run. B) neither the short run nor the long run. C) the short run, but not in the long run. D) the long run, but not in the short run.