According to Friedman and Phelps, When Is the Unemployment Rate

question 159

Multiple Choice

According to Friedman and Phelps, when is the unemployment rate above the natural rate?

• A) when actual inflation is greater than expected inflation
• B) when actual inflation is less than expected inflation
• C) when actual inflation equals expected inflation
• D) when actual inflation is high

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Definitions:

Earnings Per Share

A financial metric that divides a company’s net income by the number of outstanding shares, indicating the profit earned per share of stock.

Price-Earnings Ratio

A financial indicator that evaluates the relationship between a company’s current stock price and its earnings per share.

Market Price

The current price at which an asset or service can be bought or sold in a market.

Dividend Payout Ratio

The proportion of earnings paid out as dividends to shareholders, expressed as a percentage of the company's net income.