The idea behind the Phillips curve is that ________. A) tight ...

[bobbysung]

The idea behind the Phillips curve is that ________.
 
  A) tight labor markets lead to inflationary pressures
  B) when the unemployment rate is low, wages will increase
  C) when firms raise wages to attract new workers, prices will also increase
  D) all of the above
  E) none of the above

Question 2

Macroeconomists are interested in how consumers respond to changes in the market real interest rate because
 
  A) interest rates are an important channel for the effects of monetary and fiscal policies.
  B) substitution effects and income effects net out in the aggregate.
  C) of the permanent income hypothesis.
  D) future income affects current consumption.

[huda]

Answer to Question 1

D

Answer to Question 2

A