The Analysis of the Short-Run and Long-Run Phillips Curve Suggests

question 24

Multiple Choice

The analysis of the short-run and long-run Phillips Curve suggests that an increase in aggregate demand

• A) influences real output and employment in the long run, but not in the short run.
• B) influences real output and employment in the short run, but not in the long run.
• C) does not influence the price level in the short run or the long run but only real output and employment.
• D) does not influence real output and employment in the short run or the long run but only the price level.

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Definitions:

Mutually Exclusive

Situations or decisions that cannot occur simultaneously; selecting one option precludes the choice of the other.

Net Present Value

The difference between the current value of cash inflows and the current value of cash outflows over a period of time; used to evaluate the profitability of an investment.

Internal Rate of Return

The interest rate that brings the net present value of all incoming and outgoing cash flows from an investment or project to a neutral point of zero.

Excel Spreadsheets

A software program used for data organization, analysis, and storage in tabular form.