In Macroeconomic Models, the Idea That NAIRU Can Be Influenced

question 18

Multiple Choice

In macroeconomic models, the idea that NAIRU can be influenced by the actual rate of unemployment is referred to as

• A)ludicrous.
• B)hysteresis.
• C)rational expectations.
• D)the Phillips curve.
• E)efficiency- wage unemployment.

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Definitions:

Certainty Equivalent Approach

A method used to evaluate investment opportunities under conditions of uncertainty, adjusting future cash flows to present value as if they were certain.

Forecast Cash Flow

The estimation of the amount of money expected to be received and paid out over a future period.

Risk Adjusted Rate

A rate of return that has been modified to take into account the risk of the investment, offering a way to compare the attractiveness of various investments.

New Venture

A newly established business enterprise, particularly one that is entrepreneurial in nature, aiming to meet a marketplace need by developing a viable business model around a product, service, process, or platform.