Suppose an Economy Experiences a Permanent Increase in Its Natural

question 103

Multiple Choice

Suppose an economy experiences a permanent increase in its natural unemployment rate.This change leads to

• A)a leftward shift of the short-run Phillips curve.
• B)a downward movement along the short-run Phillips curve.
• C)no change in the short-run Phillips curve.
• D)an upward movement along the short-run Phillips curve.
• E)a rightward shift of the short-run Phillips curve.

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Definitions:

Equity Method

An accounting technique used by a company to record its investment in another company when it has significant influence over that company but does not fully control it.

Investee's Net Income

The total profit of a company in which another company has an investment interest, after all expenses and taxes have been subtracted.

Original Cost

The initial amount of money spent to acquire an asset, including purchase price and all expenses incurred to bring it to its intended use.

Unrealized Gain

A profit that exists on paper as a result of an investment increasing in value but has not yet been sold for cash.