According to the Equation for the Phillips Curve, If Nominal

question 50

Multiple Choice

According to the equation for the Phillips curve, if nominal wages and labor productivity both increase by 3%, then the inflation rate _____ and unemployment _____.

• A) increases by 3%; falls
• B) increases by 3%; rises
• C) is zero; is at its natural rate
• D) increases by 3%; is at its natural rate

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Definitions:

Book Value

The value of an asset as recorded on the balance sheet, calculated as the cost of an asset minus accumulated depreciation.

Fair Value

The estimated price at which an asset would change hands between a willing buyer and seller, not under compulsion and with reasonable knowledge of the relevant facts.

Mortgage

A loan secured by real property, typically used to purchase that property.

Book Value

The value of an asset according to its balance sheet account balance, taking into account the cost of the asset minus accumulated depreciation.