Multiple Choice
The key feature due to which unexpected inflation decreases the unemployment rate is that:
A) expectations are formed irrationally.
B) reservation wages of workers are fixed.
C) workers behave irrationally.
D) firms are greedy.
E) government policy is time consistent.
Correct Answer:
Verified
Correct Answer:
Verified
Q1: Suppose that the Fed announces a low-money-growth
Q2: Wage contracts force businesses to adjust wages
Q3: Suppose that the economy has witnessed an
Q4: Suppose workers do not believe the Fed
Q5: Following a decline in the inflation rate,
Q7: The long run Phillips curve assumes that
Q8: The figure given below represents the short
Q9: The long-run Phillips curve corresponds to the
Q10: A recessionary real shock will:<br>A)shift the aggregate
Q11: According to the rational expectations view:<br>A)the economy