Figure 28-4 -Refer to Figure 28-4. Consider the Shift in the Short-Run

question 176

Multiple Choice

Figure 28-4
-Refer to Figure 28-4. Consider the shift in the short-run Phillips curves shown in the above graph. This shift may be explained by

• A) an increase in the natural rate of unemployment from 5.0 to 6.2 percent.
• B) an increase in the expected rate of inflation from 4.0 to 5.5 percent.
• C) either an increase in the natural rate of unemployment from 5.0 to 6.2 percent or an increase in the expected rate of inflation from 4.0 to 5.5 percent.
• D) None of the above is correct.

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Definitions:

Fly By Night

A term describing businesses or individuals that appear transient, unreliable, or not committed to long-term obligations.

Output Levels

The quantity of goods or services produced by a company or an economic system within a specific period.

Fixed Cost

Costs that do not vary with the level of output or sales, such as rent, salaries, and insurance premiums.

Total Cost

The complete cost of production, including both fixed and variable costs.