In the figure below, draw a short-run Phillips curve and a long-run Phillips curve if the expected inflation rate is 4 percent and the natural unemployment rate is 6 percent
Explain how the two change in the short run if:
a. slower growth in aggregate demand causes a recession.
b. the inflation rate increases.
c. the natural unemployment rate increases.
The figure with the Phillips curves is above.
a. There is a downward movement along the short-run Phillips curve.
b. There is an upward movement along the short-run Phillips curve.
c. There is a rightward shift of both the long-run and short-run Phillips curves.
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If Valerie purchases ankle socks at $5 and gets 25 units of marginal utility from the last unit, and bandanas at $3 and gets 12 units of marginal utility from the last bandana purchased, she
A) is maximizing total utility and does not want to change her consumption of ankle socks or bandanas. B) wants to consume more ankle socks and fewer bandanas. C) wants to consume more bandanas and fewer ankle socks. D) wants to consume less of both ankle sock and bandanas.
Average productivity of labor is measured as the additional output produced by an additional worker.
Answer the following statement true (T) or false (F)