Suppose that the Fed unexpectedly pursues contractionary monetary policy. What will happen to unemployment in the short run? What will happen to unemployment in the long run? Justify your answer using the Phillips curves
In the short run, unemployment will rise, because, contractionary policy reduces actual inflation and so moves the economy down along the Phillips curve. In the long run, the economy will return to its natural rate of unemployment as a reduction in expected inflation shifts the short-run Philip curve left.
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Since 1970 there has been a clear increase in the proportion of the banking industry assets made up of
A) mortgage loans. B) state and local government securities. C) cash. D) business loans.
A change in the wage causes a shift in the supply curve for labor and a
A) shift along the demand curve for labor. B) shift in the demand curve for labor. C) rotation in the demand curve for labor. D) It cannot be determined by the information provided.
Costs associated with economic growth include all of the following EXCEPT
A) environmental pollution. B) psychological problems such as depression. C) urban congestion. D) improved health care.
Which firm is not dealing with adverse selection
a. a manufacturer forgoes a usual 90 day probationary period for new employees b. a temporary clerical agency requires a typing test c. a manufacturer requires suppliers to be ISO 900 . certified d. Smokers get the worse life insurance rates as non-smokers