A Policy Maker Who Aims at Maintaining Unemployment at 5

question 171

Multiple Choice

A policy maker who aims at maintaining unemployment at 5% while the NAIRU for this economy is 4% will most likely find the economy running into:

• A)deflation.
• B)inflation.
• C)a much higher output level.
• D)a much lower unemployment level.

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Definitions:

Accounts Payable

describes the short-term liabilities a company owes to its suppliers or creditors for goods or services received but not yet paid for.

Accounts Receivable

The amount of money owed to a business by its customers for products or services that have been delivered but not yet paid for.

Liability

A financial obligation owed by an individual or entity to another party, typically classified as current or long-term.

Statement Order

The sequence in which financial statements are prepared and presented, typically starting with the income statement.