Assume Weak Growth in Aggregate Demand Keeps the Economy Below

question 85

Multiple Choice

Assume weak growth in aggregate demand keeps the economy below potential GDP,so unemployment rises but inflation falls.This explains the ________ slope of the short-run Phillips curve.

• A)positive
• B)negative
• C)zero
• D)infinite

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Definitions:

Miller-Orr Model

A financial model used to manage cash flow and cash reserves, helping firms to decide on the optimal level of cash balances and when to transfer funds.

Disbursements

Money paid out by a business or organization for various purposes, including expenses, investments, and dividends.

Average Daily Receipts

The average amount of cash that a business receives on a daily basis, calculated over a specific period.