The short-run relationship between inflation and unemployment is often called

In order for the classical model to explain expansions and recessions, which of the following would have to be true?

a. Labor supply could not change. b. The labor market equilibrium would have to change suddenly and significantly. c. Labor demand could not change. d. The labor market equilibrium would have to change slowly. e. The labor market equilibrium could not move.

Which of the following will most likely cause movement along the consumption function?

A. A change in disposable income B. A change in interest rates C. A change in tastes D. A change in consumers’ expectations