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:

Direct Method

A cash flow statement approach that lists major classes of gross cash receipts and payments, providing a clear view of actual cash flow.

Investing Activities

Investing Activities are financial transactions related to the acquisition or disposal of long-term assets and investments not related to the entity's primary operations.

Financing Activities

Transactions that involve raising capital or repaying funds, such as issuing stock or taking out loans.

Operating Activities

Transactions and events that affect net income, related to the primary operations of the business.