If the Natural Unemployment Rate Rises

question 53

Multiple Choice

If the natural unemployment rate rises

• A)the long- run Phillips curve shifts rightward and the short- run Phillips curve does not change.
• B)the short- run and long- run Phillips curves both shift rightward.
• C)the short- run and long- run Phillips curves both shift leftward.
• D)the long- run Phillips curve shifts leftward and the short- run Phillips curve does not change.
• E)the short- run Phillips curve shifts rightward and the long- run Phillips curve does not change.

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Definitions:

Economic Profit

The balance difference between total revenues and complete costs, encompassing both overt and intangible costs.

Cartel

An agreement among competing firms to control prices or exclude entry of a new competitor in a market, often to maximize profits illegally or unethically.

Marginal Cost

The change in total production cost that comes from making or producing one additional unit of a good or service.

Fixed Cost

Costs that do not change with the level of output produced, such as rent and salaries.