Moving Along the Short- Run Phillips Curve Indicates

question 16

Multiple Choice

Moving along the short- run Phillips curve indicates

• A)that the natural unemployment rate falls when the inflation rate rises.
• B)a tradeoff between inflation and unemployment so that higher inflation is related to lower unemployment.
• C)that higher inflation leads to a higher unemployment rate.
• D)that higher unemployment leads to a higher inflation rate.

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Definitions:

Coffee Shops

Retail establishments that primarily sell coffee, along with other beverages and light snacks, often serving as social hubs in communities.

Normal Good

A type of good for which demand increases when consumer income increases, and decreases when consumer income decreases, assuming all other factors remain constant.

Recession

A significant decline in economic activity spread across the economy, lasting more than a few months, typically visible in real GDP, real income, employment, industrial production, and wholesale-retail sales.

Quantity

The amount or number of a material or immaterial good considered as a unit or in total.