The arguments of Friedman and Phelps would suggest that other things the same, a country that pursues a disinflationary policy that the public does not find completely credible
a. should not see an increase in the unemployment rate even in the short run.
b. will having rising unemployment for a while, but then return to the natural rate of unemployment.
c. will have a permanently higher unemployment rate.
d. None of the above is suggested by the arguments of Friedman and Phelps.
b
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"When the Fed buys securities from a bank, the quantity of money eventually decreases by a fraction of the initial change in the monetary base." Is the previous statement correct or incorrect? Explain your answer
What will be an ideal response?
How does a tax on labor income influence the equilibrium quantity of employment?
What will be an ideal response?
Who among the following is most likely to favor an appreciation of the U.S. dollar?
a. a German professor visiting Chicago b. an American farmer who depends on exports c. an American professor on a tour of Austrian universities d. Disney World in Orlando, Florida, a popular destination for foreign tourists
If the U.S. interest rate, adjusted for people's expectation of inflation, increases sharply relative to the rest of the world, then
A) there will be a decrease in the demand for dollars in foreign exchange markets. B) there will be no change in the demand for dollars in foreign exchange markets but there will be an increase in demand for foreign currency. C) the dollar will appreciate. D) the dollar will depreciate.