If Firms and Workers Have Rational Expectations,including Knowledge of the Policy

question 123

Multiple Choice

If firms and workers have rational expectations,including knowledge of the policy being used by the Federal Reserve,the short-run Phillips curve will be

• A)negatively sloped.
• B)positively sloped.
• C)vertical.
• D)flatter in the long run than it is in the short run.

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Definitions:

Calculate

To ascertain or compute a figure or amount through mathematical processes.

Period

A specific span of time during which certain financial activities or measurements are recorded and assessed.

Cost of Goods Manufactured

The total expense incurred by a company to produce goods in a given period, including materials, labor, and overhead costs.

Determine

To establish something exactly, typically through analysis or calculation.