If Inflationary Expectations Increase,we Can Infer That

question 77

Multiple Choice

If inflationary expectations increase,we can infer that:

• A)unemployment is above the natural rate.
• B)the economy is not on the long-run Phillips curve.
• C)the short-run Phillips curve is shifting to the left.
• D)output is below potential GDP.
• E)the unemployment rate is at the natural rate.

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Definitions:

Elasticity of Demand

A measure of how much the quantity demanded of a good responds to a change in its price, income levels, or other factors.

Deadweight Loss

The loss of economic efficiency that can occur when the free market equilibrium for a good or a service is not achieved.

Taxes on Labor

Financial charges imposed by governments on workers' income, salaries, and wages.

Elderly

Individuals who are significantly beyond the usual age for retirement, often implying an age at which they receive certain societal or economic benefits like pensions.