The Basic Assertion of Those Who Argue That the Long-Run

question 14

Multiple Choice

The basic assertion of those who argue that the long-run Phillips curve is vertical is that

• A) both unemployment and price stability can be achieved through proper discretionary monetary and fiscal policies.
• B) over the long run, the Phillips curve is useful for making economic policy tradeoffs between inflation and unemployment.
• C) inflation is caused by cost-push forces and can be reduced only by wage and price controls.
• D) expansionary monetary and fiscal policies improve the rate of unemployment only temporarily because they also change inflationary expectations.
• E) the natural rate of unemployment will fall to zero over time.

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Definitions:

Fiscal Period

A specific timeframe, often one year, used by businesses for accounting purposes and preparing financial reports.

Accounting Period

A specific duration of time in which financial transactions are recorded and financial statements are prepared, commonly a year or a month.

Calendar Year

A one-year period that begins on January 1 and ends on December 31, used for general reporting and taxation purposes.

Jane's Capital

Jane's Capital refers to the amount of money or value of assets that Jane has invested in a business or enterprise.