According to the long-run Phillips curve, which of the following is true?
(a) Unemployment increases with an increase in inflation
(b) Unemployment decreases with an increase in inflation
(c) Increased automation will lead to lower levels of structural unemployment in the long run
(d) Changes in the composition of the overall demand for labor tend to be deflationary in the long run
(e) The natural rate of unemployment is independent of monetary and fiscal policy changes that affect aggregate demand
Ans: (e) The natural rate of unemployment is independent of monetary and fiscal policy changes that affect aggregate demand
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In the perfectly competitive model, all firms are assumed to be producing: a. products that are heavily advertised. b. differentiated products
c. identical products. d. complementary products.
The practice of potential buyers offering lower prices for a product of uncertain quality than they would for a product of certain quality is known as: a. the lemon problem. b. moral hazard
c. external costs. d. None of the above.