The Modern View of the Phillips Curve Suggests That

question 149

Multiple Choice

The modern view of the Phillips curve suggests that

• A) when inflation is less than anticipated, unemployment will fall below the natural rate.
• B) when inflation is steady, actual unemployment will equal the natural rate of unemployment.
• C) systematic demand stimulus policies will be unable to affect prices in the long run.
• D) there will be a trade-off between inflation and unemployment in the long run.

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Definitions:

Guilty

A legal term for a person determined to have committed a crime or a feeling of responsibility for wrongdoing.

Warn

To inform someone of possible dangers or problems, or to advise caution.

Shape Constancy

The perceptual phenomenon where the perceived shape of an object remains constant despite changes in the angle of observation or illumination.

Ponzo Illusion

A visual illusion where two horizontal lines of identical length appear different in length because of their background cues, demonstrating depth perception.