The next questions refer to the following.
Suppose that, in the absence of supply shocks, the inflation-unemployment relationship is inflation rate = expected inflation rate + 2(natural rate of unemployment - actual unemployment rate) .
-If consumers expect an inflation rate of .06,the natural rate of unemployment is .05,and the actual unemployment rate is .07,then the actual inflation rate is
A) .02
B) .04
C) .06
D) .08
E) .10
Correct Answer:
Verified
Q22: Which of the following is not a
Q23: Which of the following would occur under
Q24: A balanced budget rule which precluded a
Q25: In which case is time-inconsistency most likely
Q26: The increase in unemployment needed to reduce
Q28: A tax cut
A) pushes the inflation-unemployment coordinates
Q29: The next questions refer to the following.
Suppose
Q30: In the long run,the Phillips Curve
A) slopes
Q31: Central bank independence
A) allows the central bank
Q32: The next questions refer to the following.
Suppose
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