The Idea That,in the Long Run,the Phillips Curve Is Vertical,implying

question 49

Multiple Choice

The idea that,in the long run,the Phillips curve is vertical,implying no trade-off between inflation and unemployment,is based on the premise that

• A)inflation and unemployment are unrelated.
• B)expectations do not adjust to reflect actual inflation.
• C)changes in unemployment do not influence real GDP.
• D)inflationary expectations fully adjust to actual inflation.
• E)inflationary expectations do not influence inflation.

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Definitions:

Accrued Expenses

Expenses that have been incurred but not yet paid or recorded in the company's books.

Prepaid Expenses

Expenses paid in advance and recorded as assets until they are actually used or consumed.

Unearned Revenues

Represents income received by a company for goods or services that are yet to be delivered or performed.

Accrued Revenues

Income earned during an accounting period but not yet received or recorded at the statement date, representing future cash receipts.