Unemployment and inflation are important determinants of short-run material welfare, whereas productivity growth is an important determinant of long-run material well-being.

Question

Quizplus · Accepted Answer

Unemployment and inflation directly impact the current material well-being of individuals, while productivity growth determines the potential for future material well-being. Therefore, unemployment and inflation are more relevant to short-run material welfare, while productivity growth is more relevant to long-run material well-being.

Unemployment and Inflation Are Important Determinants of Short-Run Material Welfare