If the Phillips Curve Was Nearly Horizontal, A

question 146

Multiple Choice

If the Phillips curve was nearly horizontal, a:

• A)​substantial increase in inflation would be caused by a decrease in unemployment.
• B)​substantial decrease in inflation would be caused by a decrease in unemployment.
• C)​substantial decrease in unemployment could be achieved with only a small increase in inflation.
• D)​substantial increase in unemployment could be achieved with only a small increase in inflation.

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Definitions:

Demand Curve

The demand curve is a graphical representation showing the relationship between the quantity of a good consumers are willing to buy and its price.

Fewer Units

A scenario where a smaller quantity of a product is being produced, stocked, or sold, possibly due to lower demand or strategic decision-making.

Given Price

A specified cost at which a product or service is offered to consumers.

Inelastic Demand

A situation where the demand for a product does not significantly change with a change in price.