Along the short-run Phillips curve SRPC0 the expected inflation rate is
A) 7 percent.
B) 3 percent.
C) 6 percent.
D) an amount that can be determined from the figure, but none of the above answers is correct.
E) an amount that cannot be determined from the figure.
B
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Refer to Figure 16-6. In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, and no fiscal or monetary policy is pursued, then at point B
A) the unemployment rate is very low. B) there is pressure on wages and prices to fall. C) income and profits are falling. D) firms are operating at below capacity. E) the economy is below full employment.
Which of the following occurs during an expansion?
a. Output rises, employment rises and unemployment falls. b. Output falls, employment rises and unemployment falls. c. Output rises, employment falls and unemployment falls. d. Output rises, employment rises and unemployment rises. e. Output rises, employment rises and tax revenues fall.