The lack of a long-run tradeoff between the unemployment rate and the inflation rate means that
A) the natural unemployment rate cannot change.
B) only a decrease in the inflation rate would bring a reduction in the natural unemployment rate.
C) only fiscal policy is effective to lower the natural unemployment rate.
D) only monetary policy is effective to lower the natural unemployment rate.
E) an increase in the inflation rate would not bring a reduction in the natural unemployment rate.
E
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Because the actual market-capitalist system is a combination of market processes and political processes,
A) it can only be managed appropriately by well-trained political economists. B) it is often unclear where to place the blame when things go wrong. C) political considerations will always ruin the market process. D) economic considerations will always ruin the political process.
Refer to Figure 3-7. Assume that the graphs in this figure represent the demand and supply curves for coffee. What happens in this market if buyers expect the price of coffee to rise?
A) Panel (a) B) Panel (b) C) Panel (c) D) Panel (d)