When the Natural Unemployment Rate Increases

question 101

Multiple Choice

When the natural unemployment rate increases,

• A)there are no shifts of either the long-run Phillips curve or the short-run Phillips curve.
• B)both the long-run Phillips curve and the short-run Phillips curve shift leftward.
• C)the long-run Phillips curve shifts rightward,and the short-run Phillips curve shifts leftward.
• D)both the long-run Phillips curve and the short-run Phillips curve shift rightward.
• E)the long-run Phillips curve shifts leftward,and the short-run Phillips curve shifts rightward.

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Definitions:

Productivity

The measure of how efficiently inputs are converted into outputs in a production process.

Residential Use

Pertains to property or resources utilized for dwelling purposes, including houses and apartments designed for people to live in.

Commercial Use

The use of products, services, or information for business purposes or financial gain, as opposed to personal or educational use.

Marginal Revenue Product

The additional revenue generated by employing one more unit of a resource, such as labor or capital, holding all other input factors constant, crucial in determining how many resources a firm should hire or use.