If the public correctly perceives that the central bank will reduce inflation, then
a. the short-run Phillips curve shifts right, and unemployment will rise by more than otherwise.
b. the short-run Phillips curve shifts right, and unemployment will rise by less than otherwise.
c. the short-run Phillips curve shifts left, and unemployment will rise by more than otherwise.
d. the short-run Phillips curve shifts left, and unemployment will rise by less than otherwise.
d
You might also like to view...
The cost savings associated with the cost-effective solution relative to a uniform standard equals
Suppose that two firms, X and Y, face the following abatement costs: MACX = 1.2AX, MACY = 0.3AY TACX = 0.6AX2 TACY = 0.15AY2 Further assume that the combined abatement standard is 40 units for both firms. a. $300 b. $108 c. $10.8 d. $9.60
There is $5,000,000 of currency in Econland, all held by banks as reserves. The public does not hold any currency. If the banks' desired reserve/deposit ratio is 0.25, then the money supply equals:
A. $20,000,000 B. $10,000,000 C. $6,250,000 D. $5,000,000
The purchasing power parity theory
a. is more a predictor of a long-run tendency than of the day-to-day relationship between changes in the price level and the exchange rate b. predicts that exchange rates between two currencies will adjust in the long run to reflect the price level difference between two countries c. is more a predictor of a short-run phenomenon than of a long-run relationship between the price level and the exchange rate between two countries d. is helpful in explaining long-run trends, even though trade barriers and central bank intervention may hinder the usefulness of the theory e. tells us that a country's currency generally will appreciate if its inflation rate is lower than that of the rest of the world
The key to understanding trade balances is to understand the relationships between flows of trade and flows of international___________________________.
a. relocation b. goodwill c. shipments d. payments