The short-run Phillips curve shows only a short-run tradeoff between the unemployment rate and the inflation rate because in the long run the
A) expected inflation rate increases.
B) unemployment rate returns to the natural unemployment rate and so there is no long-run tradeoff between the inflation rate and the unemployment rate.
C) natural unemployment rate increases.
D) inflation rate returns to the natural inflation rate and the unemployment rate returns to the natural unemployment rate.
E) inflation rate returns to the natural inflation rate and so there is no long-run tradeoff between the inflation rate and the unemployment rate.
B
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How does a firm in monopolistic competition determine its price and quantity? What type of profit can it make in the short run and the long run?
What will be an ideal response?
The cross price elasticity of demand is defined as
A) the percentage change in the supply for one good (a shift in the supply curve) divided by the percentage change in price of a related good. B) the percentage change in demand for two different commodities. C) the percentage change in the demand for one good (a shift in the demand curve) divided by the percentage change in price of a related good. D) the percentage change in price for two different commodities.