Ultimately, What Causes the Short-Run Reduction in Unemployment Associated with an Increase

question 78

Multiple Choice

Ultimately, what causes the short-run reduction in unemployment associated with an increase in inflation?

• A) the shape of the long-run aggregate-supply curve
• B) unanticipated inflation, not inflation per se
• C) rational expectations
• D) anticipated changes in the price level

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Definitions:

Diversification Benefits

The advantages gained by investing in a variety of assets to reduce risk in a portfolio.

Correlation

A statistical measure that indicates the extent to which two or more variables fluctuate together.

Minimum-Variance Portfolio

An investment portfolio designed to achieve the lowest possible risk level for its expected rate of return.

Standard Deviation

A statistic that measures the dispersion or variability of a dataset relative to its mean, commonly used to quantify the risk of a financial instrument.