The Long-Run Phillips Curve Suggests That

question 13

Multiple Choice

The long-run Phillips curve suggests that:

• A) a fall in in?ationary expectations will lead to an increase in nominal wages.
• B) there is a trade-off between unemployment and in?ation.
• C) unemployment is constant in the long run, irrespective of the rate of in?ation.
• D) ?scal policy is an effective tool in increasing the level of employment in the long run.

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Definitions:

Insider Trading

Engaging in stock exchange transactions for personal benefit by exploiting confidential information, an act considered illegal.

Securities Exchange Act

A U.S. law regulating the trading of securities, aimed at protecting investors and maintaining fair and efficient markets.

Tipper

An individual who provides privileged, non-public information to another person, typically about securities trading.

Tippee

A person who receives inside information.