The Phillips Curve Reveals That with a Constant Short-Run Aggregate

question 49

Multiple Choice

The Phillips Curve reveals that with a constant short-run aggregate supply curve, the larger the increase in aggregate demand:

• A)the lesser the increase in real output and the higher the rate of inflation.
• B)the greater the increase in real output and the higher the rate of inflation.
• C)the greater the increase in real output and the lower the rate of inflation.
• D)the lesser the increase in real output and the lower the rate of inflation.

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Definitions:

Sleepwalking

A disorder that causes people to get up and walk around while in a state of sleep.

Night Terrors

A sleep disorder causing feelings of terror or dread, and typically occurs during the first hours of stage 3-4 non-REM sleep; differs from nightmares.

Non-REM Sleep

A stage of sleep characterized by slower brain waves, reduced body movement, and absence of dreams, consisting of stages 1, 2, and deep stages 3 and 4.

Nightmares

Disturbing dreams that cause the dreamer to wake up feeling anxious and frightened.