Suppose that the central bank in this economy is concerned that inflation is too high and wants to lower the inflation rate by 4 percentage points per year. A reduction in the rate of inflation is known as . To reduce inflation from 10% to 6% in the short run, the central bank would have to accept an unemployment rate of % . True or False: If people have rational expectations, the economy will experience a higher unemployment rate than predicted by the short-run Phillips curve. True False

answer: b 56, 250

explanation:

answer; 33,000;

answer: in the short-run firms will respond by raising the price of turkey.

explanation: initially the long-run equilibrium is at a price of $5 per pound of turkey and a quantity of 50 million pounds per year. now, when webmd claims that a protein found in turkey will increase your expected lifespan by 4 years. the consumers demand for turkey will increase at every price shifting the demand curve to the right from d1 to d2. while, there will be no change in the supply curve in the short-run as it is not possible for producers to adjust supply so quickly. as a result the new equilibrium will occur at a higher price and a higher quantity of turkey.

thus, in the short run firms will respond by increasing the price of turkey, selling more quantity at a higher price and earning economic profits.