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Author Question: The long-run Phillips curve is vertical at the expected rate of inflation. Is the previous statement ... (Read 125 times)

littleanan

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on: Jun 29, 2018
The long-run Phillips curve is vertical at the expected rate of inflation. Is the previous statement correct or incorrect?
 
  What will be an ideal response?

Question 2

Under a nominal GDP targeting rule, the Federal Reserve
 
  A) changes the interest rate only when real GDP, and hence nominal GDP, is off target.
  B) cannot use the federal funds rate to conduct monetary policy.
  C) must publish its expected inflation rate.
  D) lowers its interest rate when nominal GDP falls below target.
  E) loses its ability to influence the inflation rate.


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jackie

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Reply #1 on: Jun 29, 2018
Answer to Question 1

The statement is incorrect because the long-run Phillips curve is vertical at the natural unemployment rate.

Answer to Question 2

D


littleanan

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Reply 2 on: Jun 29, 2018
Great answer, keep it coming :)

samiel-sayed

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Reply 3 on: Yesterday
Excellent

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