Based on the graph above, a cause of movement from point 1 to point 2 might be ________
A) a positive price shock
B) government policy that lowers unemployment
C) an increase in potential output
D) an increase in expected inflation
E) none of the above
B
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Suppose that a labor union negotiates an increase in wages of 4 percent for the coming year because annual inflation for the past five years has been 4 percent. The expectations formed by the union are:
a. pessimistic expectations. b. deductive expectations. c. rational expectations. d. adaptive expectations. e. optimistic expectations.
You decide to donate $5 to Jerry's Kids at the grocery store checkout, and get to sign your name to a shamrock and hang it in their window. This is an example of the economic concept of:
A. marginal utility. B. altruism. C. reciprocity. D. selfishness.