The AD-AI Analysis in Conjunction with the Phillips Curve Relationship

question 131

Multiple Choice

The AD-AI analysis in conjunction with the Phillips curve relationship shows that

• A)it is impossible to trade higher inflation for lower unemployment in the short run.
• B)there is no long-run gain from expansionary monetary policy.
• C)inflation and unemployment are positively correlated in the long run.
• D)it is possible to trade lower inflation for higher unemployment in the long run.
• E)there is no short-run gain from expansionary monetary policy.

---

Definitions:

Activity Cost Pools

A grouping of all the costs associated with a particular activity, used in activity-based costing to allocate costs more accurately.

Departmental Overhead Rates

Ratios used to allocate indirect costs to different departments based on specific criteria, such as labor hours or machine use.

Molding Department

The section in a manufacturing facility where raw materials are shaped into parts through various molding processes.

Machine Hour

A measure of production time, indicating the hours a machine is in operation.