The Modern View of the Phillips Curve Indicates That Expansionary

question 162

Multiple Choice

The modern view of the Phillips curve indicates that expansionary macroeconomic policy

• A)will reduce the unemployment rate if policy makers are willing to accept the required rate of inflation.
• B)will reduce the unemployment rate only when people underestimate the inflationary effects of the expansionary policy.
• C)will reduce the unemployment rate only when people overestimate the inflationary effects of the expansionary policy.
• D)will reduce the unemployment rate if people accurately anticipate the inflationary effects of the expansionary policy.

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Definitions:

Social Fabric

The intricate network of relationships, institutions, and cultural norms that bind a society or a community together.

Present Circumstances

The current situation or conditions in which an individual or group finds themselves.

Pessimistic Belief

A tendency to expect the worst possible outcome or to view situations from a negative perspective.

Shneidman

Edwin Shneidman, an American psychologist who is a pioneer in the field of suicidology, the study of suicide and suicide prevention.