When Inflation Expectations Are Stable, the Phillips Curve

question 68

Multiple Choice

When inflation expectations are stable, the Phillips curve:

• A) is a vertical line.
• B) shows a negative relationship between inflation and unemployment.
• C) is a horizontal line.
• D) shows a positive relationship between inflation and unemployment.

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Definitions:

Investing

The process of distributing funds with the aim of achieving returns or financial gain.

Form

A specific type of document or report required by regulatory agencies for various financial filings and disclosures.

CAPM

The Capital Asset Pricing Model, a theory used to determine the expected return on investment by correlating the risk and the non-diversifiable risk of the market.

Treynor Measures

A performance metric that assesses the returns earned on a portfolio in excess of the risk-free rate, adjusted for market risk.