A Country Reports That Its Inflation Rate and Unemployment Rate

question 14

Multiple Choice

A country reports that its inflation rate and unemployment rate have both increased.These changes could be the result of

• A) a movement upward along the short-run Phillips curve.
• B) a movement downward along the short-run Phillips curve.
• C) an upward shift of the short-run Phillips curve.
• D) a downward shift of the short-run Phillips curve.
• E) a leftward shift of the long-run Phillips curve.

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Definitions:

Economic Output

The total value of all goods and services produced within an economy over a specific period.

Living Standards

A measure of the wealth, comfort, material goods, and necessities available to a certain socioeconomic class or geographic area.

Specific Skills

Skills that are highly specialized and pertinent to a specific job or industry, enabling a worker to perform particular tasks efficiently.

Disequilibrium

A market condition where there is a mismatch between the quantity supplied and the quantity demanded, preventing market equilibrium.