Which of the Following Is Correct According to the Long-Run

question 341

Multiple Choice

Which of the following is correct according to the long-run Phillips curve?

• A)No government policy, including changes in monetary growth, can change the natural rate of unemployment.
• B)Changes in the money supply growth rate is the only government policy that can change the natural rate of unemployment.
• C)Monetary policy cannot change the natural rate of unemployment, but other government policies can.
• D)Monetary policy and other government policies can both change the natural rate of unemployment.

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Definitions:

Rate of Return

The gain or loss on an investment over a specified time period, expressed as a percentage of the investment's cost.

Exercise Price

The exercise price is the price at which the holder of an option can buy (in the case of a call option) or sell (in the case of a put option) the underlying asset.

Standard Deviation

A statistical measure of the dispersion or variability of a set of data points, representing the average difference from the mean; widely used in finance as a measure of investment risk.

Arbitrage Opportunity

The chance to buy an asset at a low price in one market and simultaneously sell it at a higher price in another, securing a risk-free profit.