According to the Long-Run Phillips Curve, in the Long Run

question 158

Multiple Choice

According to the long-run Phillips curve, in the long run monetary policy influences

• A)both the inflation rate and the unemployment rate.
• B)the inflation rate but not the unemployment rate.
• C)the unemployment rate but not the inflation rate.
• D)neither the unemployment rate nor the inflation rate.

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Definitions:

Profit

The financial gain realized when the revenue from business activities exceeds the expenses, costs, and taxes needed to sustain the activity.

Kinked-demand Curve

A demand curve that has a distinct bend or kink, typically illustrating that a firm in an oligopoly will experience a different elasticity of demand for price increases compared to price decreases.

Price Cut

A reduction in the price of a good or service to attract more customers or boost sales.

Price Increase

A rise in the cost of goods or services, often measured by inflation rates or observed in market prices.