The Short-Run Phillips Curve Intersects the Long-Run Phillips Curve at the

question 146

Multiple Choice

The short-run Phillips Curve intersects the long-run Phillips Curve at the

• A) nominal rate of interest.
• B) current rate of inflation.
• C) real interest rate.
• D) natural rate of unemployment.

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Definitions:

Inelastic

describes a situation where the demand or supply for a good is not significantly affected by changes in price.

Relatively Elastic

Describes a situation where demand for a product is sensitive to changes in its price, meaning consumers will significantly reduce or increase their demand based on price changes.

Sensitive

Responsive or easily affected by external conditions or stimuli.

Economic Theory

A concept or principles developed to explain how economies work and how economic agents interact.