If Workers Accurately Predict the Rate of Inflation,is There a Short-Run

question 156

Essay

If workers accurately predict the rate of inflation,is there a short-run trade-off between inflation and unemployment,as predicted by the Phillips curve? Why or why not?

---

Definitions:

Prime Cost

Direct materials cost plus direct labor cost.

Direct Labor

Work done by employees that can be directly traced to the production of goods or services, as opposed to indirect labor involved in support activities.

Direct Materials

The raw materials that are directly traceable to the manufacturing of a product and are an integral part of the finished product.

Depreciation

The systematic allocation of the cost of a tangible asset over its useful life, reflecting the asset's consumption or decline in value.