The Simple Phillips Curve Model Was _____ with What Occurred

question 94

Multiple Choice

The simple Phillips curve model was _____ with what occurred during the Great Recession because:

• A) consistent; the self-correcting mechanism was allowed to work.
• B) consistent; the main flaws in the model did not apply to the situation.
• C) inconsistent; the self-correcting mechanism was not allowed to work.
• D) inconsistent; the main flaws in the model applied to the situation.

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Definitions:

Flash Floods

Rapid flooding of geomorphologic low-lying areas, caused by heavy rain or other sudden water release.

Total Expenditures

The sum amount of all spending or expenses incurred by an individual or entity within a specific period.

Price Elasticity

How the requirement for a good shifts in relation to changes in its pricing.

Midpoint Method

A technique used to calculate elasticity by taking the average of the initial and final quantities and the initial and final values.