A Country Reports That Its Inflation Rate and Unemployment Rate

question 10

Multiple Choice

A country reports that its inflation rate and unemployment rate have both increased. These changes could be the result of

• A) a movement downward along the short-run Phillips curve.
• B) a leftward shift of the long-run Phillips curve.
• C) a downward shift of the short-run Phillips curve.
• D) a movement upward along the short-run Phillips curve.
• E) an upward shift of the short-run Phillips curve.

---

Definitions:

DFL

Degree of Financial Leverage; a measure that shows how much a company's earnings per share (EPS) are affected by changes in its operating income, indicating the volatility of earnings.

Dividends Per Share

The amount of dividends paid to shareholders, divided by the number of outstanding shares of a company's stock.

Stock Price

The present rate at which a company's stock is bought and sold on the stock exchange.

Present Value

The present worth of a future amount of money or sequence of cash payments, calculated using a particular return rate.