If the economy starts at the natural rate of output, then in theshort run a decrease in aggregate demand moves the economy to alower level of output and, according to the Phillips curve, ahigher level of unemployment as the inflation rate falls.
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True
False
In the long run, unemployment depends upon factors such as thenature of the job search process, the amount and duration ofunemployment benefits and the power of unions and minimum wage lawsthat alter the amount of structural unemployment.
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True
False
According to the natural rate hypothesis (Friedman and Phelps),in the short run the economy will move to a point on the Phillipscurve where the unemployment rate is lower if the inflation raterises.
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True
False
Milton Friedman argued that the Fed's control over the moneysupply could be used to peg the level or growth rate of a realvariable, but not the level or growth rate of a nominalvariable.
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True
False
In the United States, the inflation rate has been consistentlyabove 4 percent during the period from 2000 to 2015.
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True
False
