In the long run, what is the tradeoff between inflation and unemployment? Explain your answer using Phillips curve analysis
What will be an ideal response?
In the long run, there is no tradeoff between inflation and unemployment. In particular, in the long run, changes in the inflation rate have no effect on the unemployment rate. The long-run Phillips curve is vertical, thereby showing that in the long run, any inflation rate can occur but in the long run the unemployment rate will equal the natural unemployment rate.
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Sarah can bake 200 cookies in an hour or watch her favorite tv show. If she chooses to watch her show, her opportunity cost is
a. 200 cookies b. 100 cookies c. 150 cookies d. Need more information
The difference between positive economic statements and normative economic statements is that
a. both c and e are true b. positive statements are based on opinion while normative statements are based on fact c. positive statements are true and normative statements are often false d. positive statements are often false and normative statements are true e. positive statements are based on fact while normative statements are based on opinion