In Terms of the Phillips Curve, the Experience of the 1970s

question 145

Multiple Choice

In terms of the Phillips curve, the experience of the 1970s indicates that macro-policy

• A) can permanently reduce unemployment if we are willing to tolerate higher inflation.
• B) can reduce unemployment in the long run if we are willing to tolerate higher inflation.
• C) may be able to reduce unemployment but cannot retard inflation.
• D) may be able to reduce unemployment in the short run, but there is little evidence that expansionary policies can reduce unemployment permanently.

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Definitions:

Common Stock

A type of security that signifies ownership within a corporation, known as corporate equity ownership.

Cumulative Feature

A characteristic of preferred stock that entitles shareholders to receive dividends that were omitted in the past before any dividends can be issued to common stockholders.

Preemptive Right

A shareholder's right to maintain their proportionate ownership by buying additional shares before they are offered to the public.

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuer, which does not necessarily match the market value.