Asked by TEHREEM AHMED on Jun 27, 2024
Verified
In the short-run, society faces a tradeoff between inflation and unemployment.
Short-run
A time period in economics during which at least one input, such as factory size or capital, is fixed, and firms can adjust production levels only by changing variable inputs like labor.
Inflation
The growth rate of general prices for goods and services, which sequentially leads to a reduction in the ability to make purchases.
Unemployment
The situation when individuals who are capable of working and are actively seeking work are unable to find employment.
- Investigate the impact of monetary policy on inflation and unemployment rates.
Verified Answer
NY
Nishanth YohanathanJun 28, 2024
Final Answer :
True
Explanation :
This statement reflects the concept of the Phillips Curve, which suggests that there is an inverse relationship between the rate of inflation and the rate of unemployment in the short run. When unemployment is low, inflation tends to be higher, and vice versa.
Learning Objectives
- Investigate the impact of monetary policy on inflation and unemployment rates.