Disinflation can be explained by the Phillips Curve analysis as resulting from a situation where the actual rate of inflation is initially less than the expected rate, causing the unemployment rate to:
A. Rise temporarily, but consequent decreases in nominal wages will eventually bring the actual and expected rates of inflation into balance
B. Rise temporarily, but consequent increases in nominal wages will eventually bring the actual and expected rates of inflation into balance
C. Fall temporarily, but consequent increases in nominal wages will eventually bring the actual and expected rates of inflation into balance
D. Fall temporarily, but consequent decreases in nominal wages will eventually bring the actual and expected rates of inflation into balance
A. Rise temporarily, but consequent decreases in nominal wages will eventually bring the actual and expected rates of inflation into balance
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What is downward wage rigidity?
What will be an ideal response?
The above figure shows the apartment rental market in Bigtown. If severe flooding resulted in the destruction of many of the city's apartment buildings, then the
A) supply curve of apartments would shift leftward and rent would rise above $750.00. B) demand curve for apartments would shift rightward and rent would rise above $750.00. C) equilibrium quantity of apartments rented would increase beyond 3,000. D) equilibrium market price of apartments rented would fall below $750.00.