How Do You Think Each of the Following Would Affect

question 33

Essay

How do you think each of the following would affect the unemployment rate?
a.The Fed increases the money supply and engineers an unexpected increase in the rate of inflation from 2 percent to 5 percent.
b.The rate of inflation remains stable at 2 percent over a five-year period, as expected.
c.There is an unexpected decrease in the rate of inflation from 10 percent to 3 percent.

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Definitions:

Restriction of Productivity

Limitations or constraints that decrease the efficiency or output of a process, system, or individual's work.

Piece Rate Pay

A compensation system where employees are paid based on the amount of work they complete rather than the hours worked.

Hourly Wage

Compensation paid to an employee based on the number of hours worked.

Variable Pay

A portion of employees’ pay that is based on a measure of performance.