Which of the Following Statements About the Long -Run Phillips

question 158

Multiple Choice

Which of the following statements about the long -run Phillips curve is correct?

• A) The long-run Phillips curve is horizontal.
• B) The long-run Phillips curve shifts rightward and upward if the expected inflation rate increases.
• C) The long-run Phillips curve shifts leftward if the natural unemployment rate decreases.
• D) None of the above statements is correct.

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Definitions:

Central Bankers

Officials responsible for overseeing a country's monetary system and policy, including controlling the money supply and interest rates.

Active Approach

is a strategy in management or investing that involves taking specific actions to achieve a particular goal, as opposed to a passive or laissez-faire approach.

Natural Adjustments

Natural adjustments refer to the self-correcting mechanisms of markets or economies that respond to imbalances or disruptions without the need for external intervention.

Expansionary Gap

A situation where the actual output of an economy exceeds its potential output, typically characterized by increasing prices.