One event that undermined the belief that the Phillips curve represented a structural relationship was
A) the belief of Milton Friedman and Edmund Phelps that expected inflation remains constant.
B) the erratic behavior of unemployment rates and inflation rates during the 1960s.
C) the extended period of time that both unemployment and inflation remained high during the Great Depression.
D) the increase in both the inflation rate and the unemployment rate in the 1970s.
D
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By drawing a demand curve with ________ on the vertical axis and ________ on the horizontal axis, economists assume that the most important determinant of the demand for a good is the ________ of the good
A) quantity; price; quantity B) quantity; price; price C) price; quantity; price D) price; quantity; quantity
The law of demand says that as the price of a good rises,
a. buyers recognize that price may be even higher in the future, and so they buy now b. buyers purchase less in hopes that the price will fall in the future c. buyers purchase less, in part because their real income has fallen d. buyers purchase more, in part because the price of a substitute has risen e. buyers purchase more, in part because it has higher status at a higher price