The Phillips Curve Relates the Inflation Rate to The

question 120

Multiple Choice

The Phillips curve relates the inflation rate to the:

• A)unemployment rate.
• B)GDP.
• C)disposable personal income.
• D)interest rate.

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Definitions:

Marginal Cost

The added cost resulting from the manufacture of one more unit of a product or service.

Variable Input

A factor of production whose quantity can be changed easily and flexibly by a firm in the short run to adjust output levels.

Average Variable Cost

The total variable cost divided by the quantity of output produced; it shows the variable cost per unit of output.

Marginal Product

The extra output generated from the inclusion of one additional unit of a particular input while maintaining all other inputs unchanged.