In the Late 1960s,the Friedman-Phelps "Natural Rate Hypothesis" Predicted from the Microeconomic

question 29

Multiple Choice

In the late 1960s,the Friedman-Phelps "natural rate hypothesis" predicted from the microeconomic structure of the labor market that the long-run Phillips Curve is ________,while macroeconomic events caused a very ________ acceptance of this change in aggregate supply theory.

• A)horizontal,rapid
• B)horizontal,gradual
• C)vertical,rapid
• D)vertical,gradual

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Definitions:

Transfer Payments

Payments made by the government to individuals or other entities without receiving any goods or services in return, such as welfare or subsidies.

Federal Taxes

Taxes levied by the national government on income, property, sales, and other activities, used to fund public services and programs.

Automatic Stabilizers

Economic policies and programs, such as unemployment insurance and progressive taxes, that automatically adjust to stabilize economic fluctuations.

Business Cycle

The natural rise and fall of economic growth over time, characterized by periods of expansion, peak, contraction, and trough.