On a Phillips Curve Diagram, a Decrease in the Rate

question 50

Multiple Choice

On a Phillips curve diagram, a decrease in the rate of inflation, other things being equal, is represented by a(n) :

• A) upward shift of the Phillips curve.
• B) downward movement along Phillips curve.
• C) upward movement along the Phillips curve.
• D) downward shift of the Phillips curve.

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Definitions:

Cost Of Debt

The effective interest rate that a company pays on its total debt, influencing its finance strategy.

Total Capital

The sum of a company's equity and debt, reflecting the total resources available to the company for business activities.

Modigliani And Miller Model

A financial theory stating that the market value of a company is determined by its earning power and the risk of its underlying assets, and is independent of the way it chooses to finance its investments or distribute dividends.

Capital Markets

Capital Markets are financial markets where long-term debt or equity-backed securities are bought and sold, facilitating the raising of capital.