As the Relative Price Paid to a Resource in a Particular

question 27

Multiple Choice

As the relative price paid to a resource in a particular use rises,

• A)resources will be drawn from lower-valued uses to higher-valued uses
• B)resources will be drawn from higher-valued uses to lower-valued uses
• C)resources will generally remain where they are currently employed
• D)the supply of that resource will shift to the right
• E)the supply of that resource will shift to the left

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Definitions:

Phillips Curves

A graphical representation indicating the inverse relationship between the rate of unemployment and the rate of inflation in an economy.

Expected Inflation

The anticipated rate at which the general level of prices for goods and services will rise over a period.

High Inflation

A situation where there is a sustained, rapid increase in the general price level of goods and services in an economy over a period, eroding purchasing power.

High Unemployment

A condition where a large portion of the workforce is not employed, indicating a distressed economy.