Suppose an economy experiences a permanent increase in its natural unemployment rate. This change leads to
A) a downward movement along the short-run Phillips curve.
B) a leftward shift of the short-run Phillips curve.
C) a rightward shift of the short-run Phillips curve.
D) an upward movement along the short-run Phillips curve.
E) no change in the short-run Phillips curve.
C
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Which of the following helps in reducing the problem of adverse selection in health insurance markets?
A) Insurance mandates B) High premiums C) High rates of taxation D) Insurance coverage
A decrease in aggregate expenditure has what result on equilibrium GDP?
A) Equilibrium GDP falls. B) Equilibrium GDP rises. C) Equilibrium GDP is not affected by a decrease in aggregate expenditure. D) Equilibrium GDP may rise or fall depending on the size of the decrease in aggregate expenditure relative to the initial level of GDP.
Including investment and production in the two-good, two-period model with trade
A) allows the country to equalize absorption and output demand. B) renders terms of trade endogenous. C) allows the country to react to changes in the interest rate. D) allows the government to run budget deficits.
Which of the following would cause a firm's cost curve to shift downward?
a. a decrease in resource prices b. an increase in taxes c. an increase in demand for the firm's product d. a reduction in output