The Vertical Long-Run Phillips Curve

question 38

Multiple Choice

The vertical long-run Phillips curve

• A) implies that the Fed cannot influence the unemployment rate in the long run.
• B) implies that the Fed can influence the unemployment rate in the long run.
• C) implies that the Fed can influence both the unemployment rate and the inflation rate in the long run.
• D) implies that the Fed can reduce the unemployment rate in the long run only at the expense of higher inflation rate.
• E) none of the above.

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Definitions:

Overconfidence

The condition of having excessive confidence or belief in one's own abilities, often more than is objectively warranted.

Test Preparation

The process or activities undertaken to ready oneself for a standardized test, often involving reviewing content, learning strategies, and practicing test questions.

Placebo Effect

A phenomenon where a person experiences a perceived improvement in condition due to the belief in the efficacy of a treatment, despite it having no therapeutic effect.

Overconfidence

A cognitive bias characterized by an individual's belief that they are more capable or knowledgeable than they actually are.