Disinflation would eventually cause
a. the short-run and the long run Phillips curve to shift right.
b. the short-run and the long run Phillips curve to shift left.
c. the short-run Phillips curve but not the long run Phillips curve to shift right.
d. the short-run Phillips curve but not the long run Phillips curve to shift left.
d
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Refer to Table 8-1. Suppose that a simple economy produces only four goods and services: sweatshirts, dental examinations, coffee drinks, and coffee beans. Assume all of the coffee beans are used in the production of the coffee drinks. Using the information in the above table, nominal GDP for this simple economy equals
A) 3,090 units. B) $7,250. C) $8,750. D) $9,750.
If the unemployment rate in the economy is steady at 4 percent per year, how does the short-run Phillips curve predict that the inflation rate will be changing, if at all? What will happen if the unemployment rate now rises to 7 percent per year?
Assume there are no changes to inflation expectations. Provide an appropriate graph to support your discussion.
Monitoring of employees
A) is only effective while the employees are working, so that payment may be withheld for shirking. B) can be effective after-the-fact if the shirking behavior can be detected later and the employee punished. C) is only effective after-the-fact when it is possible to fire them for shirking. D) None of the above.
Diversification of assets cannot eliminate which kind of risk?
A. Idiosyncratic risk B. Market risk C. Individual risk D. Downside risk