The Phillips Curve

question 1

Multiple Choice

The Phillips curve

• A) holds that people's expectations of future inflation are based on their most recent experiences.
• B) is the combination of high unemployment rates and high inflation.
• C) holds that people form expectations on the basis of all available information.
• D) involves the strategic use of monetary policy to counteract macroeconomic expansions and contractions.
• E) indicates a short-run inverse relationship between inflation and unemployment rates.

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Definitions:

Disruptive

Causing or tending to cause interruptions or disturbances in a normal or orderly way of functioning.

Active

Engaged in action or activity; not passive, showing energetic movement or participation.

Prime-Time Television

The block of evening hours, typically 8 to 11 PM, when viewership is highest and TV shows are most widely watched.

Diverse

Showing a great deal of variety; very different or distinct in nature, form, or quality.