According to Friedman and Phelps, When Is the Unemployment Rate

question 159

Multiple Choice

According to Friedman and Phelps, when is the unemployment rate above the natural rate?

• A) when actual inflation is greater than expected inflation
• B) when actual inflation is less than expected inflation
• C) when actual inflation equals expected inflation
• D) when actual inflation is high

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Definitions:

Net Sales

The amount of sales generated by a company after deducting returns, allowances for damaged or missing goods, and discounts.

Current Ratio

A liquidity ratio that measures a company's ability to cover its short-term obligations with its short-term assets.

Liquidity

The ease with which an asset or security can be converted into cash without affecting its market price.

Short-term Debt

Borrowings that are due for repayment within one year.