The Long-Run Phillips Curve Is a

question 44

Multiple Choice

The long-run Phillips curve is a

• A)horizontal line indicating a positive relationship between inflation and unemployment.
• B)straight line with a 45 degree slope showing the long-run relationship between the inflation rate and the expected inflation rate.
• C)vertical line indicating a positive relationship between inflation and unemployment.
• D)vertical line that shows the relationship between inflation and unemployment when the economy is at full employment.
• E)horizontal line that shows the relationship between inflation and unemployment when the economy is at full employment.

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Definitions:

Step-Variable Cost

Refers to a cost that remains fixed for a certain level of production or activity, but can increase in a step manner when a certain threshold is exceeded.

Activity

The actions undertaken by an individual or organization, often relating to business operations or project management.

Variable Cost Per Unit

The cost that changes in proportion with the production volume or activity level.

Units Produced

The total number of finished units that have been manufactured during a specific time period.