Use the Table Below to Answer the Following Questions

question 39

Multiple Choice

Use the table below to answer the following questions.
Table 12.4.2
- The economy's natural unemployment rate is 4 percent.Table 12.4.2 gives some points on the economy's short- run Phillips curve.When the unemployment rate is 4 percent,

• A)actual inflation is greater than expected inflation.
• B)aggregate demand increases.
• C)and the inflation rate is 6 percent a year, the short- run and long- run Phillips curves intersect.
• D)actual inflation is less than expected inflation.
• E)and the expected inflation rate is 8 percent a year, the short- run Phillips curve shifts downward.

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Definitions:

Equity Method

An accounting technique used to record investments in other companies, where the investment's value is adjusted based on changes in the investee's equity.

After-tax Gain

The profit remaining after all taxes have been deducted.

Cost Method

An accounting method used to value an investment, where the investment is recorded at its acquisition cost without reflecting changes in its market value.

Consolidated Income Statement

A financial statement that summarizes the financial performance of a company and its subsidiaries.