The Economy Will Move to a Point on the Short-Run

question 137

Multiple Choice

The economy will move to a point on the short-run Phillips curve where unemployment is lower if

• A) the inflation rate decreases.
• B) the government increases its expenditures.
• C) the Fed decreases the money supply.
• D) None of the above is correct.

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Definitions:

FTSE

An acronym for the Financial Times Stock Exchange, referring to major stock market indices such as the FTSE 100 in the United Kingdom.

Put Option

An economic arrangement allowing the holder the option, without being compelled, to sell a designated quantity of an underlying asset at an agreed-upon price within a defined period.

Exercise Price

The price at which the holder of an options contract may buy (in the case of a call) or sell (in the case of a put) the relevant security or commodity.

Expiration Date

In finance, the date at which a derivative contract such as an option or futures agreement ceases to exist.