The Long-Run Phillips Curve

question 1

Multiple Choice

The long-run Phillips curve

• A)represents the fact that inflation is consistent with many unemployment rates
• B)represents the fact that inflation will not influence unemployment in the long run
• C)has a negative slope because the short-run Phillips curve shifts up and to the left
• D)shows that expected inflation can never equal actual inflation
• E)shows that unemployment is a short run,but not a long run,phenomenon

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Definitions:

Consumption

Utilization of products and services by household members.

Present Value

The contemporary estimate of a future monetary sum or cash flows, evaluated with a given return rate.

Investment Projects

Initiatives or plans undertaken by individuals or organizations to allocate resources with the expectation of generating future profits.

Budget Set

The collection of all possible bundles of goods and services that a consumer can afford given their income and the prices of goods.