The Modern View of the Phillips Curve Indicates That Expansionary

question 162

Multiple Choice

The modern view of the Phillips curve indicates that expansionary macroeconomic policy

• A)will reduce the unemployment rate if policy makers are willing to accept the required rate of inflation.
• B)will reduce the unemployment rate only when people underestimate the inflationary effects of the expansionary policy.
• C)will reduce the unemployment rate only when people overestimate the inflationary effects of the expansionary policy.
• D)will reduce the unemployment rate if people accurately anticipate the inflationary effects of the expansionary policy.

---

Definitions:

Population Distribution

The distribution of a variable across all members of a population.

Null Hypothesis

A statement of no difference or effect, used as the default assumption in hypothesis testing.

Alternative Hypothesis

In statistical testing, it is the hypothesis that proposes a difference or effect contrary to the null hypothesis.

Standard Error

A statistical measure that describes the accuracy with which a sample represents a population, specifically the variability of sampling distributions.