A central bank pledges to reduce the inflation rate from 20% to 5%. People reduce their inflation expectations to 10%, but the central bank only reduces inflation to 15%. What happens to the unemployment rate?
It falls.
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The maximum amount Jameson would be willing to pay for a cupcake, less the price he actually pays, is called
A) consumer surplus. B) producer surplus. C) cooperative surplus. D) deadweight loss.
Which of the following is true with regards to a long-run cost function?
a. The shape of the firm's long-run cost function is important in decisions to expand the scale of operations b. The long-run average cost curve is U-shaped c. The long-run average cost curve is flatter than the short-run average cost curve. d. The curve consists of the lower boundary of all the short-run cost curves e. All of the above
When self-correction works to eliminate an expansionary gap, _____
a. both money wages and real wages increase b. money wages increase while real wages decrease c. both money wages and real wages decrease d. money wages decrease while real wages increase e. money wages remain unchanged
Speculative demand for money is a(n):
a. positive function of prices. b. inverse function of prices. c. positive function of interest rates. d. inverse function of interest rates. e. function of unexpected needs.