If the Expectations Phillips Curve Holds True, Then the Unemployment

question 37

Multiple Choice

If the expectations Phillips curve holds true, then the unemployment rate varies with the:

• A) unanticipated inflation rate.
• B) long- run growth rate of real GDP.
• C) anticipated inflation rate.
• D) money supply.

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Definitions:

Yield To Maturity

The total return expected on a bond if the bond is held until its maturity date, incorporating both interest payments and the capital gain or loss.

Discount

The reduction applied to the nominal or face value of something, typically used in the context of bonds or selling goods and services at below their listed prices.

Coupon Bond

A bond that pays the holder a fixed interest rate (the coupon) periodically until maturity, at which point the principal and final interest payment are made.

Par Value

Par value is the face value of a bond or stock as stated by the issuing company, which does not necessarily reflect its market value.