The Figure Given Below Shows the Phillips Curves of the U.S

question 91

Multiple Choice

The figure given below shows the Phillips curves of the U.S. economy during early 1960s to late 1970s.
Figure 14.2

-Refer to Figure 14.2. Phillips curve II is associated with the late 1980s in the United States and indicates that 5 percent unemployment was consistent with 4 percent inflation. Which curve would be associated with the late 1970s in the United States?

• A) I
• B) II
• C) III
• D) IV
• E) V

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Definitions:

M3

Represents an even broader definition of the money supply, including M2 plus larger time deposits, institutional money market funds, and larger liquid assets.

M2

An expansive categorization of money that encompasses cash, checking deposits, and forms of near money that can be easily converted into cash or used for payments.

M1

M1 encompasses the most liquid forms of money supply, including cash and assets that can quickly be converted to cash.

M2

M2 is a broader classification of money supply that accounts for currency in circulation and various other types of accounts that are less liquid than those in M1.