The Pattern of Employment and Inflation Observed During the 1970s

question 6

Multiple Choice

The pattern of employment and inflation observed during the 1970s appeared to confirm the view of Phelps and Friedman that

• A) the Phillips curve was upward sloping, not downward sloping as first thought.
• B) there was no trade-off between inflation and unemployment in the long run.
• C) the expected trade-offs did not occur, meaning that policy to lower unemployment rates would not cause inflation.
• D) the aggregate supply curve actually sloped downward because price levels fell when real GDP rose.

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Definitions:

Negative Symptoms

Features that are diminished or absent in certain conditions, such as the reduced expression of emotions or decreased motivation, often associated with schizophrenia.

Loose Associations

A thought disorder characterized by disjointed thinking where the connection between thoughts is difficult to discern, often observed in schizophrenia.

Delusions

False beliefs held with conviction despite evidence to the contrary, often occurring as a symptom of psychiatric disorders.

Hallucinations

Perceptual experiences that occur without an external stimulus, often vivid and convincing, affecting various senses.