If asset prices fall and inflation expectations remain unchanged, what happens to inflation and unemployment? Defend your answer
Inflation falls and unemployment rises. The decrease in asset prices would cause consumption to fall, so aggregate demand would shift left making prices and output fall. This decrease in demand can be shown as a downward movement along a short-run Phillips curve.
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A.W. Phillips' study of unemployment and inflation in the United Kingdom specifically looked at the empirical relationship between the unemployment rate and the
A) rate of change in prices. B) rate of change in nominal wages. C) rate of change in real wages. D) level of nominal wages.
Coco chocolate manufacturers recently decided to "gift" one of its retailers a refrigerator. Why would it want to do that?
a. To ensure the retailer knowledge of their generosity b. To ensure the retailers knowledge of their quality c. To ensure the freshness of the product that reaches their consumers d. To ensure the retailers decrease in price