If Policy Makers Think the Natural Rate of Unemployment Is

question 67

Multiple Choice

If policy makers think the natural rate of unemployment is higher than it really is,then their policies designed to move the economy to the estimated natural rate,if continued over the long run,will

• A)cause continuing inflation
• B)shift the long-run aggregate supply curve to the left
• C)shift the supply curve of labor to the left
• D)reduce unemployment more than they had intended
• E)keep the economy below its potential GDP level

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Definitions:

Validity

The degree to which a test or instrument measures what it is supposed to measure.

Validity

The degree to which an idea, conclusion, or measurement is grounded in reality and accurately reflects the actual world.

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