It Is a Logical Extension of the Phillips Curve Relationship

question 34

Multiple Choice

It is a logical extension of the Phillips curve relationship between inflation and the difference between actual and potential GDP that

• A) the inflation rate and the unemployment rate should be positively correlated.
• B) the inflation rate and the natural rate of unemployment should be positively correlated.
• C) the inflation rate and the unemployment rate should be negatively correlated.
• D) the inflation rate and the natural rate of unemployment should be negatively correlated.
• E) none of the above.

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Definitions:

Categorical

Pertaining to data or variables that represent categories, such as gender, nationality, or marital status.

Correlation Coefficient

A statistical measure that calculates the strength of the relationship between the relative movements of two variables.

Independent Variable

The variable in an experiment or observational study that is manipulated or changed to observe its effect on a dependent variable.

Dependent Variable

A dependent variable is the outcome or response that researchers measure to determine the effect of varying the independent variable.