If consumer confidence rises and inflation expectations remain unchanged, what happens to inflation and unemployment? Defend your answer
Inflation rises and unemployment falls. The increase in consumer confidence shifts aggregate demand to the right making prices and output rise. The increase in the price level makes inflation higher than otherwise. The increase in output reduces the unemployment rate.
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Which of the following is used to argue that the self-interest of public policymakers will often lead to actions that are inconsistent with the preferences of the voters they represent?
A) the median voter theorem B) the voting paradox C) rent seeking D) transitivity of voters' preferences
The effect throughout the entire economy of one individual's increase in spending will be
a. less than the individual's spending. b. equal to the individual's spending. c. greater than the individual's spending. d. offset by another individual's saving.