The Short-Run Phillips Curve and the Long-Run Phillips Curve Intersect

question 58

Multiple Choice

The short-run Phillips curve and the long-run Phillips curve intersect at the___________ and___________

• A) expected inflation rate; the expected employment rate
• B) expected inflation rate; the natural unemployment rate
• C) expected inflation rate; the expected unemployment rate
• D) natural inflation rate; the expected employment rate

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Definitions:

Personal Consumption Expenditures

The component of a nation's economy that includes the total amount spent by individuals and households on goods and services.

Market Value

The current price at which an asset or service can be bought or sold in the market.

Net Domestic Investment

The total investment in a country's economy in a given year, minus the depreciation on existing capital.

Gross Domestic Investment

The total amount of money that is invested within a country’s borders in the form of capital purchases and investments in construction and inventory changes.