If the natural unemployment rate is 5.5 percent, then the economy is in an inflationary gap when the actual unemployment rate is
A) greater than 5.5 percent.
B) less than 5.5 percent.
C) 0 percent.
D) 5.5 percent.
B
You might also like to view...
In the 1960s, many economists and policy makers considered the trade-off between inflation and unemployment revealed in the Phillips curve to be permanent
This belief was challenged by ________, who argued that there is no trade-off between inflation and unemployment and the long run. A) Paul Samuelson and James Tobin B) Robert Lucas and Thomas Sargent C) Finn Kydland and Edward Prescott D) Milton Friedman and Edmund Phelps
In order to import German goods into the United States, U.S. importers must buy those goods with German currency, i.e., Euros. Assume, all else constant, there is a decrease in the price of U.S.-made cars compared to the price of German cars
Based on this information, we can conclude, with certainty, that in the market for Euros (where the price of Euros is measured in dollars), this would cause: A) an increase in the equilibrium price of Euros. B) a decrease in the equilibrium price of Euros. C) an increase in the equilibrium quantity of Euros. D) a decrease in the equilibrium quantity of Euros.
The primary argument against active monetary and fiscal policy is that
a. attempts to stabilize the economy do not constitute a proper role for government in a democratic society. b. these policies affect the economy with a long lag. c. these policies affect the economy too quickly and with too much impact. d. history demonstrates that interest rates respond unpredictably to active policies, leading to unpredictable effects on income.
To maximize profits, a perfectly competitive firm should produce where marginal:
A. cost equals marginal revenue. B. revenue exceeds marginal cost. C. cost equals total revenue. D. cost exceeds marginal revenue.