One reason that the Phillips curve "broke down" is that it
a. is unable to explain short-run movements in inflation and unemployment, but does a better job of explaining long-run movements.
b. assumes a quick-acting self-correcting mechanism, and the economy has a very slow self-correcting mechanism.
c. is a statistical relationship, and some of the points are not sustainable in the long run.
d. cannot explain demand-side inflation, and it collapsed when demand-side inflation was predominant in the 1970s.
c
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If population growth occurs while jobs are difficult to obtain or labor force participation does not increase
A) there may be little or no increase in a nation's labor resources. B) per capita GDP is likely to increase sharply. C) economic growth will be robust because any population gain is a plus. D) a nation's labor resources will still continue to increase in both quality and quantity.
New Keynesians hypothesize that
A) fluctuations in output are largely caused by supply shocks. B) the relationship between inflation and unemployment is exploitable in the long run. C) the relationship between inflation and unemployment is exploitable in the short run. D) there is no relationship between inflation and unemployment.
The Law of Supply ensures that supply curves slope upward
Indicate whether the statement is true or false
The rate of change in GDP over time is called the:
A. price accelerator. B. output generator. C. Gini coefficient. D. economic growth rate.