[Solved] The Natural Rate of Unemployment Equals

If unemployment persists for a long period of time, the natural rate of unemployment rises.

If inflationary expectations on the part of the public increase, the trade-off between inflation and unemployment becomes worse.

What is the relationship between the short-run Phillips curve and the long-run Phillips curve?

Suppose a candidate for Prime Minister makes a statement in a debate whereby he promises that he would encourage the Bank of Canada to permanently lower the unemployment rate to 3%.His opponents claim that this type of policy idea is mired in the 1960s and would only cause inflation.Explain what the opponent means.

The expansionary monetary and fiscal policies of the 1960s resulted in ________ inflation rates and ________ rates of unemployment. A)high; high B)low; low C)low; high D)high; low

The natural rate of unemployment will not change following an increase in ________ unemployment. A)cyclical B)frictional C)structural D)seasonal E)all of the above

What can the Bank of Canada do to reduce the natural rate of unemployment? A)nothing B)reduce the required reserve ratio C)reduce the target for the overnight rate D)purchase additional government bonds E)enact more restrictive lending practices

An increase in frictional unemployment will A)shift the long-run Phillips curve to the right. B)increase the natural rate of unemployment. C)shift the short-run Phillips curve to the right. D)All of the above are correct. E)None of the above is correct.

A decrease in cyclical unemployment will A)shift the long-run Phillips curve to the left. B)decrease the natural rate of unemployment. C)shift the short-run Phillips curve to the left. D)All of the above are correct. E)None of the above is correct.

Ceteris paribus, an increase in the current or actual rate of inflation will cause A)the short-run Phillips curve to shift upward. B)the unemployment rate to decrease (a movement along the short-run Phillips curve). C)the long-run Phillips curve to shift leftward. D)expectations of future inflation rates to be revised downward. E)cause the Bank of Canada to enact expansionary monetary policy.