Consider a nation experiencing the relationship illustrated by the short-run Phillips curve. An increase in both unemployment and inflation in this nation over the next ten years can be explained by:
a. a downward movement along the short-run Phillips curve.
b. a series of outward shifts of the short-run Phillips curve.
c. an upward movement along the short-run Phillips curve.
d. a series of inward shifts of the short-run Phillips curve.
e. a complete change in the slope of the Phillips curve.
b
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The unemployment rate in the United States increased from 5% in December 2007 to 9.9% in December 2009
Was this almost doubling of the unemployment rate due to cyclical, frictional, or structural reasons, and did the increase in unemployment change the natural rate of unemployment?
Suppose an economy has a balanced federal budget, and a favorable supply shock hits the economy. Tax revenues will ________ and expenditures on transfer payments will ________, resulting in a budget ________.
A. fall; increase; deficit B. increase; increase; surplus C. fall; fall; deficit D. increase; fall; surplus