Figure 17-4 -Refer to Figure 17-4.Consider the Shift in the Short-Run Phillips

question 4

Multiple Choice

Figure 17-4
-Refer to Figure 17-4.Consider the shift in the short-run Phillips curves shown in the above graph.This shift may be explained by

• A)an increase in the natural rate of unemployment from 5.0 to 6.2 percent.
• B)an increase in the expected rate of inflation from 4.0 to 5.5 percent.
• C)either an increase in the natural rate of unemployment from 5.0 to 6.2 percent or an increase in the expected rate of inflation from 4.0 to 5.5 percent.
• D)None of the above is correct.

---

Definitions:

Marginal Revenue Product

The additional revenue produced by adding one more unit of a specific input (like labor), assuming other inputs remain constant.

Perfect Competitor

A hypothetical market scenario where numerous small firms compete against each other, and none of them can influence the market price.

Output

The total amount of goods or services produced by a business, industry, or economy in a given period.

Price

The amount of money expected, required, or given in payment for something, reflecting its value or worth.