Unemployment Hits Pandemic Low in March

The labor market’s momentum has been accompanied by a surge in inflation, presenting a major headache for Federal Reserve officials. The Fed raised interest rates by 0.25 percentage points in March and has signaled further increases.—washingtonpost.com

Answer the following questions to check your understanding of the story.

What is the major headache for Federal Reserve officials?

The major headache for Federal Reserve officials is that _______.

a) there is a tradeoff between inflation and unemployment in the long run

b) the Fed must wait for instructions from Congress before it can act

c) action to lower the inflation rate also lowers the unemployment rate below the natural unemployment rate.

d) raising the interest rate to slow inflation also increases unemployment

How does the short-run Phillips curve illustrate the information in the news clip?

The information in the news clip is illustrated as ________________.

a) a movement down along the short-run Phillips curve

b) a downward shift of the short-run Phillips curve

c) a movement up along the short-run Phillips curve

d) an upward shift of the short-run Phillips curve

Unemployment Hits Pandemic Low in March

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