-An Economy's Natural Unemployment Rate Is 4 Percent

question 50

Multiple Choice

-An economy's natural unemployment rate is 4 percent. The table above gives some points on the economy's short-run Phillips curve. When the unemployment rate is 4 percent

• A) actual inflation is greater than expected inflation.
• B) actual inflation is less than expected inflation.
• C) and the inflation rate is 6 percent a year, the short-run and long-run Phillips curves intersect.
• D) and the expected inflation rate is 8 percent a year, the short-run Phillips curve shifts downward.

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Definitions:

Insufficient Funds

A situation where an account does not have enough money available to cover a transaction.

Overdraft

A situation where an individual withdraws more money from a bank account than what is available, resulting in a negative balance.

Dishonor

The refusal or inability to pay a financial obligation or honor a contractual agreement.

Forged Check

A check that has been illegally altered or signed by someone other than the account holder, without authorization.