The Natural Rate Hypothesis States That in the Long Run

question 113

Multiple Choice

The natural rate hypothesis states that in the long run,

• A)economic policy can reduce both inflation and unemployment
• B)the economy's natural rate of annual growth is approximately 3%
• C)monetary and fiscal policy have their greatest effect on the rate of unemployment
• D)the Phillips curve is horizontal
• E)the economy tends toward the natural rate of unemployment

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Definitions:

Baked Potato

A culinary dish prepared by baking a potato in an oven or over a fire until it is soft inside with a crispy skin.

Collective Unconscious

A concept by Carl Jung referring to the part of the unconscious mind which is derived from ancestral memory and experience and is common to all humankind.

Ancestral Memory

The theory that individuals inherit memories and experiences of their ancestors.

Preconscious

Refers to the part of the mind that contains thoughts, memories, and feelings that are not currently in conscious awareness but can easily be brought to consciousness.