The Phillips Curve Is Thought to Reflect the Relationship Between

question 200

Multiple Choice

The Phillips curve is thought to reflect the relationship between

• A)unemployment and real GDP.
• B)unemployment and inflation.
• C)inflation and real GDP.
• D)the price level and inflation.

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Definitions:

Pure Exchange Economy

An economic model where no production occurs and individuals or entities trade pre-existing goods and services among each other.

Walras's Law

A principle in general equilibrium theory stating that if all markets but one are in equilibrium, then the remaining market must also be in equilibrium.

Cobb-Douglas Utility Functions

A particular form of utility function used in economics that represents preferences over two goods, characterized by their constant elasticity of substitution.

Pareto Optimal

A distribution state of resources where no adjustment can be made to better the position of any individual or evaluation criterion without negatively affecting another.