Each Point on a Phillips Curve Is a Different Combination

question 31

Multiple Choice

Each point on a Phillips curve is a different combination of

• A) aggregate output and the unemployment rate.
• B) the inflation rate and the unemployment rate.
• C) aggregate output and the inflation rate.
• D) saving and disposable income.

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Definitions:

Marginal Cost Curve

It illustrates the change in total cost that arises when the quantity produced is incremented by one unit; this is the cost of producing one additional unit of a good.

Short-Run Supply

The supply provided by firms in the short term when at least one input, usually capital, is fixed.

Economic Profit

The contrast between the aggregate income and complete costs, both visible and unseen, of a company.

Market Price

The current price at which an asset or service can be bought or sold in a competitive marketplace.