What will actual unemployment be (in relation to the natural rate) in each of the following cases? Use a graph of the modern Phillips curve in your answer
a. Decision makers underestimate inflation.
b. Decision makers overestimate inflation.
c. Decision makers correctly forecast inflation.
a. Actual unemployment will fall below the natural rate.
b. Actual unemployment will rise above the natural rate.
c. Actual unemployment will equal the natural rate.
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If the current exchange rate is 1.00 euro per dollar and the expected exchange rate at the end of the month rises to 1.20 euros per dollar, then the demand for dollars ________ because people expect holding of dollars to become ________ profitable
A) decreases; more B) increases; less C) increases; more D) does not change; neither more nor less E) decreases; less
If it costs Sinclair $300 to produce 3 suede jackets and $420 to produce 4 suede jackets, then the difference of $120 is the marginal cost of producing the 4th suede jacket
Indicate whether the statement is true or false