Which of the Following Does the Long-Run Phillips Curve Tell

question 71

Multiple Choice

Which of the following does the long-run Phillips curve tell us?

• A) That output can be below potential in the long run
• B) That the unemployment rate can take on any value in the long run
• C) That output can be maintained above potential in the long run
• D) That unemployment will return to the natural rate in the long run
• E) That the inflation rate cannot rise above 10 percent in the long run.

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Definitions:

Net Income

It represents the amount of money that remains after subtracting all operating expenses, taxes, and costs from total revenue – a key indicator of a company's financial health.

Long-Term Debt

Long-term debt refers to loans and financial obligations lasting more than one year, often used for significant investments or expenses by a company.

Equity

The value of an ownership interest in a firm, including stocks and retained earnings, representing the residual assets after deducting liabilities.