Assume that expected inflation is based on the following: ?et = ??t-1. If ? = 0, we know that
A) a reduction in the unemployment rate will have no effect on inflation.
B) low rates of unemployment will cause steadily increasing rates of inflation.
C) high rates of unemployment will cause steadily declining rates of inflation.
D) the Phillips curve illustrates the relationship between the level of inflation rate and the level of the unemployment rate.
D
You might also like to view...
Average fixed cost: a. declines continuously as output increases
b. is always greater than average variable cost. c. equals the difference between average total cost and average variable cost. d. is characterized by both (a) and (c).
Ninth National Bank holds $200 million in checkable deposits and $18,000,000 in total reserves. With a required reserve ratio of 8 percent, how much in excess reserves is Ninth National holding?
A) $1,440,000 B) $218,000,000 C) $17,440,000 D) $16,000,000 E) $2,000,000