9. Study Questions and Problems #9Initially, the economy is operating at the natural unemployment rate of 5%, and the inflation rate is also 5%. People correctly anticipatethat a tax cut will cause the inflation rate to rise to 7%.According to rational expectations, inflationand the unemployment rate5% in the shortrun. In the long run, the unemployment rate will be5%. 9. Study Questions and Problems #9Initially, the economy is operating at thethat a tax cut will cause the inflation ratte of 5%, and the inflation rate is also 5%. People correctly anticipateremains constant at 5%goes to 7%decreases below 5%According to rational expectations, inflationand the unemployment rate5% in the shortrun. In the long run, the unemployment rate will be5%.Savo & Continue

The price change of commodities in the economy in the current year to the base year is the inflation…

9. Study Questions and Problems #9 Initially, the economy is operating at the natural unemployment rate of 5%, and the inflation rate is also 5%. People correctly anticipate that a tax cut will cause the inflation rate to rise to 7%. According to rational expectations, inflation run. In the long run, the unemployment rate will be 5%. . and the unemployment rate 5% in the short

9. Study Questions and Problems #9 Initially, the economy is operating at the natural unemployment rate of 5%, and the inflation rate is also 5%. People correctly anticipate that a tax cut will cause the inflation rate to rise to 7%. According to rational expectations, inflation run. In the long run, the unemployment rate will be 5%. . and the unemployment rate 5% in the short

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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4. As the general price level changes, substitution bias in price indices results in underestimation of the change in the cost of living. 5. A core inflation index is typically calculated by taking the CPI and excluding volatile economic variables. 9. Inflation can help nullify problems created by sticky nominal wages, because with inflation real wages can fall even if nominal wages are constant.
Q24 The natural rate of unemployment is generally assumed to be Select one: a. the rate of unemployment at which the expected inflation rate is zero b. the rate of unemployment at which the expected inflation rate is equal to the actual inflation rate c. the rate of unemployment at which the actual inflation rate is zero d. very close to zero percent since everyone who wants to work is already working
28 In applying the Phillips Curve, if Congress enacts expansionary policies to reduce unemployment, the cost is Multiple Choice O O an increase in the inflation rate. a decrease in the inflation rate. an increase in productivity. a decrease in productivity.
9. Study Questions and Problems #9 Initially, the economy is operating at the natural unemployment rate of 4%, and the inflation rate is also 4%. People correctly anticipate that the Fed's hike in the discount rate will cause the inflation rate to fall to 2%. According to rational expectations, inflation , and the unemployment rate 4% in the short run. In the long run, the unemployment rate will be 4%.
5. Identifying costs of inflation Beth owns and operates a store in a country experiencing a high rate of inflation. In order to prevent the value of money in her cash register from falling too quickly, Beth sends an employee to the bank four times per day to make deposits in an interest-bearing account that protects the store's revenues from the effects of inflation. This is an example of the of inflation.
5. All of the following are requirements for reducing inflation without causing a recession except: a. workers and firms must form expectations rationally. b. the plan must be announced before expectations are formed. c. the plan must be believed by workers and firms. d. the government's budget must be balanced.
Question 12 In the short run, unemployment and inflation are positively related. In the long run they are largely unrelated problems. O True False
Plz
4.) There are 80 million citizens in an economy. 45 million people are in the labor force and 1.8 million are unemployed.a) Calculate the unemployment rate.b) The natural rate of unemployment is 5%. How will the inflation rate change?c) Due to the progress of digitalization, the natural rate of unemployment decreases to 3.5% in the next year. However, the actual unemployment rate initially remains constant due to other effects. How does the inflation rate change?
8
Q.3.1In a country with a population of 100 million people there are 20 million children under the age of 15 years, 50 million employed, 27 million unemployed and 3 million full time students. Calculate the unemployment rate Q.3.2 Explain, with the aid of a graph, the demand‐pull inflation
Demand-pull inflation Demand-pull inflation occurs when: A. input costs rise. B. unemployment is above the natural rate. C. people incorrectly forecast inflation. D. aggregate demand increases.