How Does the Short-Run Phillips Curve Model Reflect an Increase

question 83

Multiple Choice

How does the short-run Phillips curve model reflect an increase in the natural rate of unemployment?

• A) as a leftward shift in the short-run Phillips curve
• B) as a rightward shift in the short-run Phillips curve
• C) as a downward movement along the short-run Phillips curve
• D) as an upward movement along the short-run Phillips curve

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Definitions:

Demand Curve

A graph showing the relationship between the price of a good or service and the quantity demanded, typically downward-sloping.

Consumers' Incomes

The total amount of income earned by consumers, influencing their ability to purchase goods and services.

Normal Good

A type of good for which demand increases as the income of the consumer increases, indicating a direct relationship between income and demand.

Yield to Call

The return an investor would receive if a callable bond is held until the issuer exercises their option to redeem it before its maturity date.