If the natural rate of unemployment falls,
a. both the short-run Phillips curve and the long-run Phillips curve shift.
b. only the short-run Phillips curve shifts.
c. only the long-run Phillips curve shifts.
d. neither the short-run nor the long-run Phillips curves shift.
a
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When the inflation rate is negative, the
A) real interest rate is greater than the nominal interest rate. B) real interest rate is less than the nominal interest rate. C) nominal interest rate is zero. D) real interest rate equals the nominal interest rate.
Assume that the central bank purchases government securities in the open market. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the GDP Price Index and net nonreserve-related international borrowing/lending in the context of the Three-Sector-Model?
a. The GDP Price Index falls, and net nonreserve-related international borrowing/lending becomes more negative (or less positive). b. The GDP Price Index and net nonreserve-related international borrowing/lending remain the same. c. The GDP Price Index falls, and net nonreserve-related international borrowing/lending becomes more positive (or less negative). d. The GDP Price Index rises, and net nonreserve-related international borrowing/lending becomes more negative (or less positive). e. The GDP Price Index rises, and net nonreserve-related international borrowing/lending becomes more positive (or less negative).