The Long-Run Phillips Curve Applies When the Economy Is at Full

question 9

Multiple Choice

The long-run Phillips curve applies when the economy is at full employment, so the long-run Phillips curve is ________, which demonstrates that changes in the inflation rate ________ effect on unemployment.

• A) vertical; have an
• B) an upward-sloping straight line with a 45° slope; have an
• C) vertical; have no
• D) horizontal; have no
• E) a downward-sloping straight line with a 45° slope; have an

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Definitions:

Marginal Product

The additional output resulting from using one more unit of a given input, holding all other inputs constant.

Total Cost Curve

Represents the total economic cost of production, which is the sum of fixed and variable costs at different levels of output.

Accountants

Professionals who perform accounting functions such as audits, financial statement analysis, and advisories on financial transactions and tax strategies.

Opportunity Costs

The value of the next best alternative foregone as the result of making a decision.