The Phillips Curve Shows

question 76

Multiple Choice

The Phillips curve shows

• A)a positive relationship in the long-run between the rate of inflation and the rate of unemployment.
• B)a negative relationship between the inflation rate and the unemployment rate,at least in the short run.
• C)a positive relationship between contractionary monetary policy and higher price levels.
• D)a positive relationship between price stability and constant,small-increment changes in the fiscal policy on the part of the Bank of Canada.

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Definitions:

Financial Leverage

Financial leverage is the use of borrowed funds to increase the potential return of an investment, magnifying both potential gains and potential losses.

Dividend Rate

The total expected dividend payments from an investment or security expressed on an annual basis.

Premium on Stock

The amount by which the price paid for a stock exceeds its par (or nominal) value, representing additional capital paid in by investors.

Treasury Stock

Stocks that the issuing entity initially sold and then bought back, decreasing the total number of stocks available in the market.