The Phillips Curve Shows

question 95

Multiple Choice

The Phillips curve shows:

• A)the relationship between the interest rate and the inflation rate.
• B)the relationship between the inflation rate and the rate of unemployment.
• C)the relationship between the unemployment rate and the level of real GDP.
• D)the relationship between the growth rate and the inflation rate.
• E)the relationship between the rate of unemployment and the growth rate.

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Definitions:

Interest Expense

The cost incurred by an entity for borrowed funds; it is the price paid for the use of borrowed money, or, for corporations, the price paid for the use of borrowed capital.

Payout Ratio

A financial metric that measures the proportion of earnings a company pays to its shareholders in the form of dividends.

Net Income

Net income is the total profit of a company after all expenses and taxes have been deducted from total revenue.

Retained Earnings

Profits that a company keeps after dividends have been paid out, which may be used for investment or to pay off debt.