If the price elasticity of supply is 2 and the quantity supplied decreases by 6%, then the price must have decreased by 3%

Suppose that last year the unemployment rate was 5 percent and the inflation rate was 2.5 percent. If the natural rate of unemployment is 5 percent, how do you expect inflation to change?

What will be an ideal response?

One reason why an economy may not smoothly adjust to a macroeconomic shock is that

A) prices are flexible in the long run. B) prices are sticky in the short run. C) wages are sticky in the long run. D) prices and wages are sticky in the long run.