In the long run, perfectly competitive firms make zero economic profit, that is, their owners make a normal profit

The short-run Phillips curve suggests what policy making implications?

A) Using discretionary policies, it may be possible to achieve just the right unemployment and inflation mix. B) Active policy making does not yield any predictable results. C) Maintaining both the inflation and unemployment rates at low levels is possible if policy makers will rely solely on nondiscretionary policy making. D) Passive policy making is more effective than active policy making.

If the Kenyan nominal exchange rate declines, and prices are unchanged in Kenya and abroad, then the Kenyan real exchange rate

a. does not change. b. rises. c. declines d. None of the above is necessarily correct.