In the Long Run, What Are the Effects of a Decrease

question 20

Multiple Choice

In the long run, what are the effects of a decrease in the rate of growth of the money supply on the Phillips curves?

• A)It shifts both the long-run and the short-run Phillips curves right.
• B)It shifts the long-run Phillips curve left and the short-run Phillips curve right.
• C)It shifts the long-run Phillips curve right and the short-run Phillips curve left.
• D)It leaves the long-run Phillips curve unchanged and shifts the short-run Phillips curve left.

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Definitions:

Regression Equation

An equation that describes the relationship between independent variables and a dependent variable, often used to predict the latter from the former.

SSE

Stands for Sum of Squared Errors, a measure of the variation or dispersion of data points around a regression line or mean.

SST

Often refers to the Total Sum of Squares, which is a measure used in statistical analysis to quantify the variation within a set of observations.

Linear Regression

A statistical method that models the relationship between a dependent variable and one or more independent variables by fitting a linear equation to observed data.