Samuelson and Solow, in their 1960 study of the Phillips curve as it applies to the U.S. experience, argued that there was a tradeoff between inflation and unemployment. Later experience showed their analysis to be
A) entirely correct in every situation.
B) generally correct, but it could not explain stagflation.
C) wholly wrong in every situation.
D) in general agreement with rational expectations theory.
E) capable of explaining stagflation, but not other economic scenarios.
B
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One of the primary determinants of planned real investment spending is the
A) rate of real government spending. B) rate of real saving. C) expectation of future profits. D) rate of real consumption spending.
According to the rational expectations hypothesis, an individual's assessment of future economic performance
A) considers both past performance and current monetary and fiscal policy. B) only considers past performance. C) does not consider the impact of inflation. D) does not consider past performance.
The demand for factor is driven by the demand for goods and services produced by that factor of production. This phenomenon is referred to as
A) elastic demand. B) joint demand. C) inverse demand. D) derived demand.
The main result of the monetarist model is that
A) the economy is slow to adjust to sticky wages and prices. B) workers and firms have rational expectations. C) the quantity of money should be increased at a constant rate. D) productivity shocks explain fluctuations in real GDP.