According to the Phillips Curve Relationship, a Contraction in Potential

question 29

Multiple Choice

According to the Phillips curve relationship, a contraction in potential GDP for whatever reason can be expected to

• A) cause prices to climb as long-run equilibrium is reachieved.
• B) cause prices to fall as long-run equilibrium is reachieved.
• C) cause no effect on prices as employment adjusts in the long run.
• D) cause no effect on real GDP because price adjustments would reachieve long-run equilibrium.
• E) none of the above.

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Definitions:

Antidepressant Medication

Drugs specifically designed to alleviate the symptoms of depression by adjusting the chemical imbalances in the brain.

Depression

A common and serious mood disorder characterized by persistent feelings of sadness, hopelessness, and a lack of interest or pleasure in previously rewarding or enjoyable activities.

Reuptake Process

The mechanism in neurotransmission where a neurotransmitter is taken back into the neuron after it has been released into the synapse.

Serotonin Synapses

Serotonin synapses are junctions between neurons where serotonin, a key neurotransmitter involved in mood regulation, is transmitted from one neuron to another.