Refer to Figure 28-2. Suppose the economy is at point A in the figure above. Which of the following is true?
A) Actual inflation is 1%.
B) The economy will move from A to B.
C) The expected rate of inflation is 5.5%.
D) The current unemployment rate is 3.8%.
E) The current unemployment rate is equal to the natural rate of unemployment.
E
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When real GDP increases, the demand for money ________ and the demand for money curve ________
A) does not change; does not shift B) increases; shifts rightward C) increases; shifts leftward D) decreases; shifts leftward E) decreases; shifts rightward
Consumers in Beachland consume only two goods, sodas and DVDs. If they spend $10 on sodas and $90 on DVDs a month, how many sodas and DVDs are in their CPI market basket if the price of a soda is $1 and the price of a DVD is $9?
A) 9 sodas and 1 DVD B) 1 soda and 9 DVDs C) 10 sodas and 9 DVDs D) 10 sodas and 10 DVDs E) It is impossible to determine the market basket without information on the quantity of at least one of the two goods consumed.