Figure 3-3 ​ In Figure 3-3, a Shift from a to B Seems

question 53

Multiple Choice

Figure 3-3 ​

In Figure 3-3, a shift from A to B seems most consistent with which of the following scenarios?

• A)Society has decided to give guns lower priority.
• B)Technological advances have been greater for guns than for butter.
• C)The society has experienced a massive immigration of labor.
• D)There are unemployed resources in the production of both guns and butter.

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Definitions:

Long-run Phillips Curve

A graphical representation suggesting that in the long run, there is no trade-off between inflation and unemployment.

Higher Inflation

Higher Inflation occurs when there is a sustained increase in the general price level of goods and services, reducing purchasing power over time.

Long Run

A period in economics where all inputs can be adjusted, and companies can change all factors of production.

Phillips Curve

An economic model suggesting an inverse relationship between rates of unemployment and corresponding rates of inflation.