The Short-Run Phillips Curve Shows That

question 121

Multiple Choice

The short-run Phillips curve shows that:

• A)the economy can have low inflation and low unemployment simultaneously.
• B)the economy can have high per-capita income and high interest rate simultaneously.
• C)a reduction in per-capita income comes at the expense of lower inflation.
• D)a reduction in unemployment comes at the expense of higher inflation.
• E)a reduction in inflation comes at the expense of lower exchange rate.

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Definitions:

Payback Period

The time required for an investment to generate cash flows sufficient to recover the initial investment cost.

Scrap Value

The estimated resale value of an asset at the end of its useful life, also known as salvage value.

Incremental Annual

Incremental annual refers to the year-over-year changes or additional amounts in revenue, cost, or other financial metrics.

Internal Rate

Typically refers to the internal rate of return (IRR), which is the discount rate that makes the net present value (NPV) of all cash flows from a particular project equal to zero.