According to the Original Phillips Curve,the Cost of Reducing the Unemployment

question 7

Multiple Choice

According to the original Phillips curve,the cost of reducing the unemployment rate in the short run is a

• A) fall in Real GDP.
• B) fall in nominal GDP.
• C) lower rate of price inflation.
• D) higher rate of wage inflation.

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Definitions:

Resource Demand Curve

A graphical representation that shows the relationship between the price of a resource and the quantity of that resource that is demanded.

Wage Rate

The amount of money paid to an employee per unit of time, such as an hour or a week.

Hiring Workers

The process of employing individuals to perform tasks or services for a business or organization in exchange for compensation.

Shoe Shine Parlor

A storefront or establishment specializing in the cleaning, conditioning, and polishing of shoes.