If the Phillips Curve Represents a "Structural Relationship," Then

question 110

Multiple Choice

If the Phillips curve represents a "structural relationship," then

• A)the trade-off between unemployment and inflation is permanent.
• B)the trade-off between unemployment and inflation holds only for the short run.
• C)the trade-off between unemployment and inflation holds in the long run,but not in the short run.
• D)the Phillips curve will be vertical in the long run.

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Definitions:

Present Value

The monetary value as of now of future payments or a lump sum, calculated with a certain interest rate.

Discount Rate

Used in discounted cash flow analysis, this rate aids in calculating the present worth of cash flows anticipated in the future.

Cash Flows

The aggregate of all monetary exchanges into and out of a business endeavor, directly affecting its operational cash levels.

Discount Rate

The interest rate used in discounted cash flow forecasts to decipher the present value of prospective cash flows.