Economics (MindTap Course List)
13th Edition
ISBN: 9781337617383
Author: Roger A. Arnold
Publisher: Cengage Learning
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Question
Chapter 16, Problem 15QP
To determine
Whether the economy is in long run or not.
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Students have asked these similar questions
According to Friedman, in which of the following situations is the economy in long-run equilibrium?
a.
The expected economic growth rate is 3 percent and the actual inflation rate is 3 percent.
b.
The average inflation rate over the past five years is 2 percent and the expected inflation rate is 2 percent.
c.
The expected inflation rate is 3 percent and the actual inflation rate is 3 percent.
d.
The expected economic growth rate is 2 percent and the expected inflation rate is 2 percent.
Q3-7
In the AD/AS framework, when the economy is in long-run equilibrium,
Select one:
a. inflation is occurring.
b. the entire labour force is employed.
c. actual prices are equal to expected prices.
d. actual levels of income and employment are less than the natural levels of income and employment.
What is the short-run relationship between the unemployment rate and inflation rate as explained by the economist Phillips?
Chapter 16 Solutions
Economics (MindTap Course List)
Ch. 16.2 - Prob. 1STCh. 16.2 - Prob. 2STCh. 16.2 - Prob. 3STCh. 16.3 - Prob. 1STCh. 16.3 - Prob. 2STCh. 16.3 - Prob. 3STCh. 16.5 - Prob. 1STCh. 16.5 - Prob. 2STCh. 16 - Prob. 1QPCh. 16 - Prob. 2QP
Ch. 16 - Prob. 3QPCh. 16 - Prob. 4QPCh. 16 - Prob. 5QPCh. 16 - Prob. 6QPCh. 16 - Prob. 7QPCh. 16 - Prob. 8QPCh. 16 - Prob. 9QPCh. 16 - Prob. 10QPCh. 16 - Prob. 11QPCh. 16 - Prob. 12QPCh. 16 - Prob. 13QPCh. 16 - Prob. 14QPCh. 16 - Prob. 15QPCh. 16 - Prob. 1WNGCh. 16 - Prob. 2WNGCh. 16 - Prob. 3WNGCh. 16 - Prob. 4WNGCh. 16 - Prob. 5WNG
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Similar questions
- Consider an economy that is initially in its long-run equilibrium. Suppose this economy suffers a temporary negative supply shock. If the central bank’s sole objective is to stabilize output in the short-run, then what will happen after the central bank has responded according to its objective? A. Inflation will be lower, output will back at its original level B. Inflation will be lower, output will be lower C. Inflation will be higher, output will be higher D. Inflation will be lower, output will be higher E. Inflation will be higher, output will be lower F. Inflation will be higher, output will back at its original levelarrow_forwardKeynesian theory suggests that in the short run _________ a prices fluctuate significantly. b wages and prices are free flowing. c wages are based on supply and demand. d wages and prices are sticky.arrow_forwardExplain why the Aggregate Supply curve is upward slopingarrow_forward
- 181.In June 2008 Zimbabwe had the world's highest unemployment rate. A)True B)False 182.In the classical model of the price level, there is NO distinction between the short run and the long run. A)True B)False 183.The short-run aggregate supply curve is positively sloped because wages and prices are not all completely flexible. A)True B)False 184.The classical model of the price level is more accurate during low inflation than high inflation. A)True B)False 185.An inflation tax is the effect on the public of a reduction in the value of money caused by inflation. A)True B)False 186.An inflation rate of 5% will increase the purchasing power of $1 to $1.10. A)True B)False 187.It is impossible for the U.S. government to raise revenue by printing more money because the Federal Reserve, not the Treasury, issues most of the U.S. money supply. A)True B)False 188.People can avoid the inflation tax by…arrow_forwardHow would you explain the logic of a potential short run trade-off between unemployment and inflation to the President? In other words, why might there be an inverse relationship between unemployment and inflation over the short run when the economy is very close to full employment and no technological advances are occurring simultaneously?arrow_forwardthe misperceptions theory of the short run aggregate supply curve says that if the price level is higher than people expected then some firms believe that the relative price of what they produce has decreased and so they increase production decreases so they decrease produciton increased so they increase production increased so they decrease productionarrow_forward
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