The Long-Run Phillips Curve Shows the Relationship Between

question 86

Multiple Choice

The long-run Phillips curve shows the relationship between:

• A) potential aggregate output and the natural rate of unemployment at a given rate of expected inflation.
• B) expected inflation and actual inflation after the expectation becomes embedded in people's minds.
• C) the aggregate output and the aggregate price level at a given rate of expected inflation.
• D) unemployment and inflation after expectations of inflation have had time to adjust to experience.

Understanding the role of world price in determining market outcomes under free trade.

Differentiating between importing and exporting countries based on domestic and world prices.

Recognizing the benefits of international trade.

Understanding arguments for and against trade restrictions.

---

Definitions:

Market Economy

An economic system where the prices of goods and services are determined in a free price system, primarily through supply and demand.

Nationalization

The process by which governments take private assets into public ownership, usually key industries or resources.

State-Owned Enterprise

A business entity that is owned and operated by the government in order to provide goods or services to the public.

Environmental Needs

Environmental needs refer to the essential conditions and resources required for ecosystems and human life to thrive, including clean air, water, soil, and suitable climatic conditions.