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Author Question: According to the Phillips curve, a more expansionary macro-policy that causes inflation to be ... (Read 38 times)

craiczarry

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on: Jun 30, 2018
According to the Phillips curve, a more expansionary macro-policy that causes inflation to be greater will:
 a. place downward pressure on prices.
  b. reduce unemployment.
  c. reduce output.
  d. reduce the natural rate of unemployment.

Question 2

What is full employment? What are the different kinds of unemployment? What constitutes the natural (normal) rate of unemployment?


elyse44

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Reply #1 on: Jun 30, 2018
Answer to Question 1

b

Answer to Question 2

Full employment exists when approximately 95 percent of the civilian labor force is employed. This implies a natural rate of unemployment of approximately 5 percent. The natural rate of unemployment consists of the frictionally and structurally unemployed. The only other type of unemployment is cyclical unemployment.


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