According to the theory of rational expectations, when it comes to expected changes in the inflation rate, the short-run Phillips curve would be:
a. vertical

If Hillary goes surfing for two hours instead of earning $10 per hour for those two hours, her opportunity cost is

A) the good time spent surfing. B) the minimum wage that some other people would earn. C) the travel time to the beach. D) $20.

Identify the ways in which each of the following determinants would have to change if each was causing a decrease in aggregate demand: consumer wealth, consumer expectations, business taxes, national income in countries abroad, exchange rates.

What will be an ideal response?