The vertical long-run Phillips curve
a. shows the Fed's employment options
b. is vertical because the Fed refuses to change the unemployment rate in the long run
c. indicates that the Fed cannot affect the unemployment rate in the long run
d. is fixed permanently
e. measures recessionary pressures
C
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A trade imbalance occurs when:
A. the quantity of imports equals the quantity of exports, but are large relative to total output. B. a country does not import or export any goods or services. C. exports from and imports to a country suddenly decline. D. the quantity of a country's exports differs significantly from the quantity of imports.
The quantity of dollars demanded by foreign nations increases as
A) U.S. residents purchase more foreign goods. B) foreigners purchase more U.S. goods. C) more U.S. residents travel abroad. D) U.S. exports fall.
In 1981, the US government passed a law that significantly lowered tax rates on high-income individuals. The premise was that high tax rates deter high-income individuals from working and investing, reducing the growth of the economy. This is an example of
A. the equality-efficiency trade-off. B. usury. C. the effects of budget deficits on future generations. D. the cost disease of the public sector. E. the importance of externalities.
When competition is present and property rights secure, people will be encouraged to
a. plunder the resources of others. b. pay the lowest possible wages. c. provide others with things that they value in exchange for income. d. Invest in other countries where markets are less competitive and property rights less secure.