AWPhillips Collected Data on the Rate of Change in Money

question 75

Multiple Choice

A.W.Phillips collected data on the rate of change in money wages and plotted it against unemployment rates in the United Kingdom.The curve he fit to the data showed that

• A) the rate of change of money wage rates and unemployment rates were inversely related.
• B) the rate of change of money wage rates and unemployment rates were directly related.
• C) the rate of change of money wage rates and unemployment rates were independent.
• D) as money wage rates increased,the unemployment rate was cut in more than half.

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Definitions:

Government

The governing body of a nation, state, or community, responsible for making and enforcing laws, policies, and managing public resources.

Perfectly Price Elastic

A market scenario where the demand for a product is extremely sensitive to changes in price, meaning consumers will stop buying the product if the price increases even slightly.

Demand Curve

A graphical representation of the relationship between the price of a good and the quantity demanded by consumers at various prices.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in its price, indicating how sensitive consumers are to price changes.