The Long-Run Phillips Curve Is

question 177

Multiple Choice

The long-run Phillips curve is:

• A) the same as the short-run Phillips curve.
• B) negatively sloped, showing an inverse relationship between unemployment and inflation.
• C) vertical at the nonaccelerating inflation rate of unemployment (NAIRU).
• D) unrelated to the NAIRU.

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Definitions:

Variable Budget

A financial plan that adjusts for changes in the volume of activity, allowing for flexible cost controls depending on actual performance.

Management by Exception

A management strategy where only significant deviations from set standards are brought to the attention of management.

Variances

The differences between planned or expected financial outcomes and the actual results achieved.

Fixed Budget

A budget that outlines expected revenues and expenses over a specific period, which does not adjust in response to changes in business activity levels.