Incorporation of expectations into economic decision making ...

[chads108]

Incorporation of expectations into economic decision making indicates that in the long run:
 a. inflation relates directly to unemployment.
  b. inflation is inversely related to unemployment.
  c. the Phillips curve is vertical at the natural rate of unemployment.
  d. high unemployment is a primary cause of inflation.

Question 2

Suppose a market basket of goods and services costs 400 in the base year and the consumer price index (CPI) is currently 125 . This indicates the price of the market basket of goods is now:
 a. 275.
  b. 425.
  c. 500.
  d. 525.

[dpost18]

Answer to Question 1

c

Answer to Question 2

c