Along a Short-Run Phillips Curve When the Inflation Rate Rises

question 144

Multiple Choice

Along a short-run Phillips curve when the inflation rate rises,

• A) the real wage rate falls and more labor is hired.
• B) the money wage rate falls because the labor market becomes less tight.
• C) potential GDP decreases.
• D) the expected inflation rate rises.
• E) the expected inflation rate falls.

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Definitions:

General Direction

The overall strategic approach or guidance for the operations and decisions of an organization or project.

Term to Maturity

The duration of time left until the expiration or due date of a financial instrument, such as a bond, at which point the principal is supposed to be paid back to investors.

Coupon

A coupon refers to the annual interest rate paid on a bond, expressed as a percentage of the face value.

Yield to Maturity

The total return anticipated on a bond if it is held until it matures, considering all payments of interest and principal.