Refer to the graph below. Assume the economy is at the initial position of B2. It is possible for the government to reduce the unemployment rate and move the economy to C2 if:
A. Expected inflation remains at 4%
B. Expected inflation becomes 8%
C. Actual inflation remains at 4%
D. Actual inflation is at 12%
A. Expected inflation remains at 4%
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For a given supply curve, how does the elasticity of demand affect the burden of a tax imposed on a product?
A) The excess burden of the tax will be greater when the demand is more elastic than when it is less elastic. B) The excess burden of the tax will be greater when the demand is less elastic than when it is more elastic. C) The excess burden of the tax will be minimized when the demand is unit elastic. D) The excess burden of the tax will be greater when the elasticity of supply is greater than the elasticity of demand.
Tests of the Heckscher-Ohlin model by Bowen, Leamer, and Sveikauskas and by Maskus continue to
A) provide strong support for the theory. B) provide weak support for the theory. C) provide evidence against the theory.