Use the following diagram to answer the next question.
The move from point 1 to point 2 in the diagram represents ________.
A. a decrease in both the unemployment rate and the inflation rate
B. a decrease in the unemployment rate and an increase in the inflation rate
C. an increase in the unemployment rate and a decrease in the inflation rate
D. an increase in both the unemployment rate and the inflation rate
Answer: B
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When it comes to active policy making most economists agree that
A) active policy making should be used over passive policy making. B) it is unlikely that active policy making will have any long term effects on the economy. C) it is likely that active policy making will have long term effects on the economy. D) it will lead to long term shocks in the system.
Marginal costs rise if there are increasing returns
Indicate whether the statement is true or false
The deadweight loss from a tax of $x per unit will be smallest in a market
a. in which demand is elastic and supply is inelastic. b. in which demand is inelastic and supply is elastic. c. in which demand is inelastic and supply is inelastic. d. None of the above are correct; we need to know the value of x in order to determine the answer.
Describe the automatic stabilizers that are lost to a country that fixes its exchange rate to another currency.
What will be an ideal response?