Contrary to What Believers in the Phillips Curve Would Say

question 8

Multiple Choice

Contrary to what believers in the Phillips curve would say, U.S. economic data from 1955 to 2000 show evidence of:

• A) a positive relationship between the unemployment rate and inflation.
• B) no short-run relationship between the unemployment rate and inflation.
• C) increases in both unemployment and inflation rates.
• D) a constant rate of inflation, with changing rates of unemployment.
• E) a constant rate of unemployment, with changing rates of inflation.

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Definitions:

MRP Curve

The MRP curve, or Marginal Revenue Product curve, illustrates the additional revenue generated by employing an additional unit of a resource, such as labor.

Wage Rate

Wage rate is the fixed amount of compensation or payment given to an employee by an employer in return for work performed.

Workers Hired

Refers to the process of employing individuals to perform various tasks and functions within an organization or business.

Marginal Physical Product

Represents the additional quantity of output that is produced by utilizing one more unit of a variable input, holding all other inputs constant.