Use the Following to Answer Questions

question 265

Multiple Choice

Use the following to answer questions
Figure: Understanding Phillips Curves
-(Figure: Understanding Phillips Curves) What is the expected inflation rate associated with Phillips curve PC_a?

• A) zero
• B) 3%
• C) 4%
• D) 5%

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Definitions:

Discouraged Workers

People who are not actively seeking employment due to believing no jobs are available for them or there are no positions for which they would qualify.

Unemployed

The condition of being jobless despite actively searching for work within the recent past.

Recession Year

A year during which an economy experiences a downturn and reduced economic activity for two consecutive quarters or more.

Rate of Inflation

The velocity at which the cumulative price level of goods and services elevates, thereby diminishing the purchasing capability.