The sacrifice ratio is
A) the amount of output lost when the inflation rate is reduced by one percentage point.
B) the percentage reduction in inflation when output falls one percentage point below potential.
C) the percentage change in employment when output declines by one percentage point.
D) the number of percentage points that the unemployment rate rises when output declines by one percentage point.
A
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The monetary policy target the Federal Reserve focuses primarily on today is
A) M1. B) M2. C) the interest rate. D) the inflation rate. E) the unemployment rate.
An analysis of the American economy since 1960 shows that there is a stable relationship between inflation and unemployment
A) only in the short run. B) only in the long run. C) in neither the short run nor the long run. D) in both the short run and the long run.