The price level in the economy between 2014 and 2015 rose from 100 to 105. Between 2015 and 2016, the price level rose from 105 to 110.25. How does the short-run Phillips curve predict the unemployment rate will change as a result?
A) The unemployment rate will increase since inflation increased.
B) The unemployment rate will decrease since inflation increased.
C) The unemployment rate will decrease since inflation decreased.
D) The unemployment rate would not change since there is no change in the rate of inflation.
D
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One of the main determinants of real GDP per person is the growth of capital per person. Which of the following variables does NOT determine the growth of capital per person in the long run?
A) average saving rate B) output-to-capital ratio C) marginal tax rate on investment D) depreciation rate