Samuelson and Solow, in their 1960 study of the Phillips curve as it applies to the U.S. experience, argued that there was a tradeoff between inflation and unemployment. Later experience showed their analysis to be
A) entirely correct in every situation.
B) generally correct, but it could not explain stagflation.
C) wholly wrong in every situation.
D) in general agreement with rational expectations theory.
E) capable of explaining stagflation, but not other economic scenarios.
B
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When each voter has a most-preferred outcome for the expenditure on a particular government program, majority rule will produce the outcome
a. preferred by the mean (average) voter. b. preferred by the median voter. c. that causes the political party in power to increase its power. d. defined by Arrow's Impossibility Theorem.
One year nominal GDP was $286 billion and the price index was 88. Real GDP that year was
A. $252 billion B. $325 billion C. $308 billion D. $262 billion