To say that the natural rate of unemployment changes over time is to say that a.the long-run Phillips curve shifts over time. b.the Federal Reserve influences the natural rate of unemployment over time. c.the aggregate demand curve shifts over time. d.the short-run Phillips curve shifts over time.

Unemployment refer to a situation where the individual in the economy belongs to the age group of…

Answered: To say that the natural rate of…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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To say that the natural rate of unemployment changes over time is to say that

	a.	the long-run Phillips curve shifts over time.
	b.	the Federal Reserve influences the natural rate of unemployment over time.
	c.	the aggregate demand curve shifts over time.
	d.	the short-run Phillips curve shifts over time.

Definition Definition Relationship between the rate of unemployment and the rate of inflation that shows that the lower the initial rate of unemployment, the greater the rise in wage rate corresponding to a given rise in the rate of unemployment. The Phillips curve assumes that the ratio between prices and nominal wage rates is constant in the short run. Presented graphically, the Phillips curve shows an inverse relationship between the rate of unemployment and the rate of inflation.

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