In the Long Run

question 135

Multiple Choice

In the long run,

• A) attempts to "fine-tune" the economy cause the rate of unemployment to accelerate.
• B) there is no inflation-unemployment trade-off.
• C) there is an inflation-unemployment trade-off, and the terms of that trade-off have worsened in recent years.
• D) there is an inflation-unemployment trade-off, but the terms of that trade-off have improved in recent years.

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Definitions:

Total Risk

The complete range of risks associated with an investment, including both systemic and unsystematic risk.

Modigliani

Refers to Franco Modigliani, an Italian-American economist known for his work on corporate finance, the Modigliani-Miller theorem, and the life-cycle hypothesis of saving.

Developed

Pertains to countries that have a high level of industrialization, a high standard of living, and a well-established economic structure.

Evaluating Mutual Funds

The process of assessing the performance, management, and investment strategies of mutual funds to determine their suitability for an investor.