Assume That the Phillips Curve Equation Is Represented by Nt

question 48

Multiple Choice

Assume that the Phillips curve equation is represented by nt - nt- 1 = (m + z) - aut. An increase in the unemployment rate will cause:

• A) an increase in the markup over labour costs.
• B) an increase in the inflation rate over time.
• C) a decrease in the markup over labour costs.
• D) a decrease in the inflation rate over time.
• E) an increase in expected inflation.

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The act of following, obeying, or conforming to a set rule, standard, or demand.