The Original Phillips Curve Implied or Assumed That

question 20

Multiple Choice

The original Phillips curve implied or assumed that

• A)the markup over labor costs was zero.
• B)the expected rate of inflation would be zero.
• C)the actual and expected rates of inflation would always be equal.
• D)all of the above
• E) none of the above

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Definitions:

Government Bond

A type of investment where an investor loans money to a government in exchange for periodic interest payments plus the return of the bond's face value at maturity.

Treasury Bill

A Treasury Bill (T-Bill) is a short-term U.S. government debt obligation backed by the Treasury Department with a maturity of one year or less.

Inflation Rate

The inflation rate measures how much the general level of prices for goods and services is rising, and, subsequently, how purchasing power is eroding over time.

Standard Deviation

A statistical measure of the dispersion or variability of a set of data points, often used to quantify the risk associated with a particular investment or portfolio.