The Phillips Curve Is an Extension of the Model of Aggregate

question 7

Multiple Choice

The Phillips curve is an extension of the model of aggregate supply and aggregate demand because, in the short run, an increase in aggregate demand increases prices and

• A) decreases growth.
• B) decreases unemployment.
• C) increases unemployment.
• D) decreases inflation.

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Definitions:

Tariffs

Taxes or duties imposed on imported or, less commonly, exported goods to control trade flows or raise government revenue.

Tax Incentives

Financial benefits offered by governments to encourage certain activities or investments, such as reducing taxes for eco-friendly practices.

Total Cost

The aggregate expenditure involved in creating a product or service, including all variable and fixed costs.

Construction Cost

The total expenses incurred during the building of a structure, including materials, labor, and other related costs.