If, in the Long Run, People Adjust Their Price Expectations

question 42

Multiple Choice

If, in the long run, people adjust their price expectations so that all prices and incomes move proportionately to an increase in the price level, then the long-run Phillips curve

• A) has a slope that is determined by how fast people adjust their price expectations.
• B) is negatively sloped.
• C) is vertical.
• D) is positively sloped.

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Definitions:

Mutually Exclusive

Describes events that cannot occur at the same time.

Possible Outcomes

All the potential results that may occur from a specific action, experiment, or situation.

Interpret

To explain the meaning or significance of something, particularly data or statistical results.

Classical

In the context of statistics, classical refers to traditional theories and methods that form the foundational principles of statistical analysis.