If an Increase in Inflation Permanently Reduced Unemployment, Then

question 49

Multiple Choice

If an increase in inflation permanently reduced unemployment, then

• A)money would not be neutral and the long-run Phillips curve would slope upward.
• B)money would not be neutral and the long-run Phillips curve would slope downward.
• C)money would be neutral and the long-run Phillips curve would slope upward.
• D)money would be neutral and the long-run Phillips curve would slope downward.

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Definitions:

Local Spending

Expenditures by individuals, businesses, or government within a specific geographic area, contributing to the local economy.

Gains From Trade

The benefits that individuals, companies, or countries experience as a result of engaging in voluntary trade.

Efficiency

The optimal use of resources to achieve the desired output with minimum waste or expense.

Community

A group of people living in the same place or having a particular characteristic in common.