Which of the Following Will Cause the Phillips Curve to Shift

question 49

Multiple Choice

Which of the following will cause the Phillips curve to shift to the left?

• A)Attacks by terrorists.
• B)Increasing regulation in the economy.
• C)Increasing the marginal tax rate on excess profit.
• D)Job search assistance.

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Definitions:

Forecasting Error

The difference between the actual outcome and the predicted value in a forecast.

Operating Leverage

A measure of how revenue growth translates into growth in operating income, indicating a company's fixed versus variable costs.

Variable Costs

Expenses that change in proportion to the level of production or sales, such as raw materials and labor costs.

Operating Leverage

Operating leverage describes the extent to which a company can increase profits by increasing sales, indicating the proportion of fixed costs to variable costs.