If expectations are “rational,” can the Fed control unemployment?
A. Yes, provided it announces policy in advance.
B. Yes, if it affects the aggregate demand curve.
C. No, because aggregate supply is vertical even in the short run.
D. No, because only fiscal policy can affect unemployment.
Answer: C
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The above figure shows the U.S. market for replacement cell phone batteries. With free trade, U.S. production is equal to ________ batteries per year
When a $2 tariff is in place, U.S. production is equal to ________ batteries per year. A) 900,000; 700,000 B) 300,000; 100,000 C) 100,000; 500,000 D) 300,000; 500,000 E) 100,000; 300,000
If the price elasticity of demand for a good is 1.4, then a 14 percent increase in the quantity demanded must be the result of
a. a 0.1 percent decrease in the price. b. a 1 percent decrease in the price. c. a 10 percent decrease in the price. d. a 19.6 percent decrease in the price.