If Inflationary Expectations Are Stable and There Is No Current

question 58

Multiple Choice

If inflationary expectations are stable and there is no current inflation, the short-run Phillips curve will intersect the long-run Phillips curve at:

• A)​a 0 percent unemployment rate.
• B)​a 2 percent unemployment rate.
• C)​a 4 percent unemployment rate.
• D)​the natural rate of unemployment.

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Definitions:

Market Power

The ability of a company to manipulate price by controlling supply or dominating the market.

Nineteenth Century

The period from January 1, 1801, through December 31, 1900, marked by significant industrial, cultural, and political changes worldwide.

Oligopoly

A market structure characterized by a small number of large firms that dominate the market, often leading to limited competition.

Railroads

Transportation systems consisting of tracks on which trains travel to carry goods and passengers over long distances.