A trade-off between aggregate output and inflation
A) is theoretically possible, but has never been observed in practice.
B) may exist in the short run, but not in the long run.
C) may exist in the long run, but not in the short run.
D) exists in both the short run and the long run.
B
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People who are risk averse
A) value a collection of assets only on the basis of its expected returns. B) value a collection of assets only on the basis of the risk of that return. C) value a collection of assets not only on the basis of its expected returns but also on the basis of the risk of that return. D) are less likely to invest in life insurance. E) are less likely to have a diverse portfolio.
If you regularly spend $100 a month on gasoline and the price of gasoline doubles, your purchasing power has
A) increased. B) remained constant. C) became stable. D) decreased.