Unformatted text preview: ionary expectations shifts the economy's short run Phillips curve to the left. Answer: FALSE Diff: 2 Topic: The Short-Run Relationship Between the Unemployment Rate and Inflation Skill: Conceptual AACSB: Reflective Thinking 14.5 The Long -Run Aggr egate Suppl y Curv e, Poten tial GDP, and the Natur al Rate of Une mplo ymen t 1 M ul ti pl e C 1) h o i c e In the long run, the Phillips curve will be vertical at the natural rate of unemployment if A) the long-run B) aggregate demand curve is vertical at potential GDP. the long-run C) aggregate demand curve is horizontal at the natural rate of inflation. the long-run D) aggregate supply curve is vertical at potential GDP. the long-run supply curve is horizontal at the natural rate of inflation. Answer: C Diff: 2 Topic: The Long-Run Aggregate Supply Curve, Potential GDP, and the Natural Rate of Unemployment Skill: Conceptual AACSB: Reflective Thinking 2) If the Phillips curve is vertical in the long run, then A) there is a trade- off between inflation and unemployment in the long run. B) the inflatio...
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- Fall '13
- Macroeconomics, AACSB, Reflective thinking, labor market, Conceptual AACSB