If the Economy Is at the Point Where the Short-Run

question 58

Multiple Choice

If the economy is at the point where the short-run Phillips curve intersects the long-run Phillips curve,

• A)unemployment equals the natural rate and expected inflation equals actual inflation.
• B)unemployment is above the natural rate and expected inflation equals actual inflation.
• C)unemployment equals the natural rate and expected inflation is greater than actual inflation.
• D)None of the above is necessarily correct.

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Definitions:

Social Security

A government program providing economic assistance to persons with inadequate or no income, funded by taxes on workers and employers.

Medicare Benefits

Medicare benefits refer to the health care services covered under Medicare, a United States federal health insurance program for people who are 65 or older, certain younger people with disabilities, and people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant).

FICA Tax

Federal Insurance Contributions Act tax used to finance federal programs for old-age and disability benefits (social security) and health insurance for the aged (Medicare).

Payroll Tax

Taxes imposed on employers or employees, and are usually calculated as a percentage of the salaries that employers pay their staff.