Refer to Table 11.1. What is the value of the government spending multiplier?

If the Fed moves the economy upward along the short-run Phillips curve from an initial inflationary equilibrium, what is happening?

a. Unemployment is rising above the natural rate, output is decreasing, and inflation is decreasing. b. Unemployment is falling below the natural rate, output is decreasing, and inflation is increasing. c. Unemployment is rising above the natural rate, output is increasing, and inflation is decreasing. d. Unemployment is falling below the natural rate, output is increasing, and inflation is increasing. e. Unemployment is falling below the natural rate, output is increasing, and inflation is decreasing.

If the graph shown is displaying a competitive labor market, the equilibrium wage in the market would be:

A. D. B. S. C. P*. D. Q*.