A Long-Run Phillips Curve Has A(n) _____ Slope Because _____

question 65

Multiple Choice

A long-run Phillips curve has a(n) _____ slope because _____.

• A) negative; there is a positive relationship between the output gap and the nonaccelerating inflation rate of unemployment (NAIRU)
• B) infinite; any unemployment rate below the NAIRU leads to ever-accelerating inflation
• C) zero; there is a positive relationship between expected inflation and unemployment
• D) positive; any unemployment rate above the NAIRU leads to ever-accelerating inflation

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Definitions:

Welfare Loss

The decrease in social welfare, usually measured in terms of lost economic efficiency or satisfaction, due to factors like taxes or monopolies.

Import Quota

A restriction imposed by a government on the quantity of a specific good that can be imported into a country during a specified time period.

Domestic Production

Domestic production denotes the total output of goods and services produced within a country's borders, reflecting the overall productive capacity and economic health of the nation.

GATT

The General Agreement on Tariffs and Trade, an international treaty designed to reduce trade barriers and promote international commerce.