If a U.S. firm produces cars in Mexico, that production should count towards
A) Mexico's GNP. B) U.S. GDP.
C) U.S. GNP. D) It will not affect either U.S. GNP or U.S. GDP.
Question 2
Refer to Figure 28-5. Consider the Phillips curves shown in the above graph. We can conclude from this graph that
A) ceteris paribus, a fall in the rate of inflation to 5 percent will increase unemployment to 7.5 percent in the short run.
B) the natural rate of unemployment in this economy is 5.5 percent.
C) the expected rate of inflation in this economy is 10 percent.
D) All of the above are correct.
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