Current Thinking on the Phillips Curve Suggests That It Would

question 83

Multiple Choice

Current thinking on the Phillips curve suggests that it would be best for policy makers to:

• A)focus on controlling unemployment.
• B)stimulate permanent shifts in aggregate supply.
• C)focus on controlling inflation.
• D)stimulate permanent shifts in aggregate demand.
• E)develop a two-pronged policy to control both unemployment and inflation.

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Definitions:

Market Economy

An economy that allocates resources through the decentralized decisions of many firms and households as they interact in markets for goods and services.

Rate Of Economic Growth

The increase in the market value of the goods and services produced by an economy over time, usually measured as the percentage increase in real gross domestic product (GDP).

Human Capital

The economic value of a worker's experience and skills, including education, training, intelligence, skills, health, and other things employers value in employees.

Tariffs

Tariffs are taxes imposed by a government on imported goods and services to protect domestic industries or to generate revenue.