Attempts by Policymakers to Keep the Rate of Unemployment Below

question 1

Multiple Choice

Attempts by policymakers to keep the rate of unemployment below the natural rate of unemployment for a sustained period of time will result in

• A)demand-pull inflation.
• B)permanently higher levels of output.
• C)a recession.
• D)a shift of the LRAS curve to the left.

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Definitions:

Supply Curves

Graphical representations showing the relationship between the price of a good and the quantity of that good that producers are willing to supply.

Price

The financial contribution expected, compelled, or made in payment for something.

Tariff

A tax imposed by a government on goods and services imported from other countries, used to control trade volumes.

Decrease in Supply

This occurs when there is a reduction in the quantity of a good or service that producers are willing and able to supply at all possible prices.