A Major Flaw in the Development of the Simple Phillips

question 70

Multiple Choice

A major flaw in the development of the simple Phillips curve is that it fails to account for the fact that:

• A) the unemployment rate can change.
• B) the price level can change.
• C) expectations can change.
• D) policies can change.

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Definitions:

Substitutes

Products or services that can replace each other in use, where an increase in the price of one leads to an increase in demand for the other.

Substitutes

Goods or services that can replace each other in use, where an increase in the price of one leads to an increased demand for the other.

Natural Gas

A fossil fuel used as a source of energy for heating, cooking, and electricity generation, consisting mainly of methane.

Coal

A combustible black or brownish-black sedimentary rock, composed mostly of carbon and hydrocarbons, used as a fossil fuel.