If the Equation for a Country's Phillips Curve Is π

question 49

Multiple Choice

If the equation for a country's Phillips curve is π = 0.02 - 0.8(u - 0.05) , where π is the rate of inflation and u is the unemployment rate, what is the short-run inflation rate when unemployment is 4 percent (0.04) ?

• A)above 2 percent (0.02)
• B)below 2 percent (0.02)
• C)2 percent (0.02)
• D)-2 percent (-0.02)

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Definitions:

Halo Effects

A mental shortcut where the general perception of an individual, brand, or product shapes one's opinions and attitudes toward their specific attributes or qualities.

Interpretation Stage

The phase in a process where data, results, or situations are analyzed and understood, often influencing future decisions or actions.

Stereotypes

Oversimplified, generalized beliefs about a particular group of people or type of person that often do not reflect reality.

Contrast Effect

Occurs when the meaning of something that takes place is based on a contrast with another recent event or situation.