A Reverse Phillips Curve Would Consist of a

question 19

Multiple Choice

A reverse Phillips Curve would consist of a

• A) positive relationship between deviations from trend in real and nominal interest rates.
• B) negative relationship between deviations from trend in real and nominal interest rates.
• C) positive relationship between deviations from trend in the level of prices and the level of aggregate economic activity.
• D) negative relationship between deviations from trend in the level of prices and the level of aggregate economic activity.

Comprehend the difference between rational and irrational decision making.

Identify the role and calculation of marginal costs and benefits in optimal decision making.

Differentiate between explicit and implicit costs and their importance in understanding economic and accounting profits.

Recognize the implications of sunk costs in economic decisions.