Which of the Following Best Explains the Negative Slope of the Short-Run

question 264

Multiple Choice

Which of the following best explains the negative slope of the short-run Phillips curve?

• A)Weak growth in aggregate demand keeps the economy below potential GDP, so unemployment rises but the rate of inflation falls.
• B)Aggregate demand grows so quickly that the inflation rate rises as unemployment rises.
• C)Long-run aggregate supply increases quickly enough that inflation falls as unemployment also falls.
• D)Short-run aggregate supply increases at the same pace as aggregate demand increases so that inflation and unemployment do not change.
• E)Strong growth in technology causes the short-run aggregate supply curve to shift rightward faster than aggregate demand, so unemployment falls and the inflation rate falls.

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Definitions:

Problem-Solving Competency

The ability to understand complex issues, identify their causes, and effectively develop, implement, and evaluate solutions.

Katz's Conceptual Skill

The ability to understand complex situations and conceive appropriate solutions, as defined by Katz within the context of managerial roles.

Knowledge In Mumford's Model

In Mumford's Model of leadership, knowledge refers to how leaders conceptualize and understand their environment, making informed decisions based on a broad and deep understanding of their context.

Mumford Et Al

Refers to the works of Mumford and colleagues, often in context to their contributions to the field of leadership, organizational behavior, or creativity research.