Question 5. The graph above reflects a significant increase in world oil prices. Which of the following is likely to result?
long run economic gains
short run economic gains
natural rate of unemployment remains constant
a rise in inflation (for instance, from 2.0% to 3.0%)
Question 6. The graph above refers to a significant increase in individual income taxes, taking them to their highest level in 50 years. Which of the following is likely to result?
cyclical unemployment will decrease
inflationary pressures will be greater
the economy will experience lower economic growth
input prices will rise in the short run