The inflation rate has been constant for several years at 4 percent, and the unemployment rate has been stable at 6 percent over the same time period. Changes in government policy that cause the inflation rate to rise to 6 percent will
A) have no effect on the unemployment rate.
B) cause the unemployment rate to fall in the short run.
C) cause the unemployment rate to rise to 9 percent in the short run.
D) cause the unemployment rate to rise in the short run, but we cannot tell by how much.
Correct Answer:
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Q78: An unexpected increase in aggregate demand causes
A)
Q79: Q80: Q81: Cyclical unemployment is negative when Q82: The short-run Phillips curve relationship indicates that Q84: What is meant by the natural rate Q85: The trade-off between unemployment and inflation is Q86: The short-run Phillips curve relationship implies that Unlock this Answer For Free Now! View this answer and more for free by performing one of the following actions Scan the QR code to install the App and get 2 free unlocks Unlock quizzes for free by uploading documents
A) the inflation
A)