The key feature due to which unexpected inflation decreases the unemployment rate is that:
a. expectations are formed irrationally.
b. reservation wages of workers are fixed.
c. workers behave irrationally.
d. firms are greedy.
e. government policy is time consistent.
b
You might also like to view...
A(n) ________ comes to an end with a business cycle ________
A) expansion; bubble B) expansion; trough C) recession; peak D) recession; trough
If you hire different workers each depending on the amount of sales you expect, this is an example of a ________ cost
a. fixed b. variable c. total d. marginal
The independence of the Fed
A. allows it to run a monetary policy different from that which elected officials might demand. B. means that the Fed frequently pursues policies quite different from what the President asks for. C. is widely agreed to be best for the nation's welfare. D. is not real, since Congress must approve its policy.
The discount rate utilized in public sector budgeting performs the functions of:
a. allocating funds between the public and private sectors b. allocating funds between present consumption and investment (i.e., future consumption) c. allocating funds between debt and equity securities d. a and b only e. none of the above