In the long run, there appears to be:
a. A clear and unequivocal tradeoff between inflation and unemployment.
b. No clear and unequivocal tradeoff between inflation and changes in a nation's nominal exchange rate.
c. A clear and unequivocal tradeoff between inflation and employment.
d. No clear and unequivocal tradeoff between inflation and changes in a nation's unemployment.
e. None of the above.
Question 2
Assume that the exchange rate changed from (a) 2/ to (b) 1.125/. What are the corresponding exchange rates for the U.S. dollar?
a. (a) 2/ and (b) 1.125/.
b. (a) 1.125/ and (b) 2/.
c. (a) 0.50/ and (b) 0.89/.
d. There is not enough information provided to answer this question.
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