If Employees and Employers Always Accurately Predict Inflation, What Is

question 88

Multiple Choice

If employees and employers always accurately predict inflation, what is the shape of the Phillips curve?

• A)It is horizontal in the short and long run.
• B)It is vertical in the short and long run.
• C)It is vertical in the short run and upward sloping in the long run.
• D)It is downward sloping in the short run and vertical in the long run.

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Definitions:

Productivity Growth

An increase in the output of goods and services per unit of input, reflecting improvements in efficiency, technology, or processes.

Productivity

A measure of the efficiency of production, often quantified as the amount of output per unit of input.

Information Phase

A stage in a process where data is collected, analyzed, and used to make decisions or resolve uncertainties.

Industrial Revolution

A period of significant industrial, technological, and social change starting in the late 18th century that profoundly transformed economies, societies, and cultures around the world.