What Does a Vertical Phillips Curve in the Long Run

question 82

Multiple Choice

What does a vertical Phillips curve in the long run imply?

• A)​In the long run, the rate of unemployment will converge toward zero.
• B)​Higher inflation does not permanently reduce the rate of unemployment.
• C)​Higher inflation increases the rate of unemployment.
• D)​Higher inflation lowers the rate of unemployment.

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Definitions:

Operating Activities

Part of cash flow analysis, these involve the core business activities of a company including production, sales, and delivery of its product or service.

Long-Term Borrowing

Loans or debts obtained with repayment schedules extending over a period longer than one year.

Dividends Paid

A corporation's distribution of earnings to its shareholders, generally as a profit allocation.

Return On Assets

A financial ratio that indicates how profitable a company is relative to its total assets, measuring efficiency in generating profits.