The Long-Run Response to an Increase in the Growth Rate

question 37

Multiple Choice

The long-run response to an increase in the growth rate of the money supply is shown by shifting

• A)the short-run and long-run Phillips curves left.
• B)the short-run and long-run Phillips curves right.
• C)only the short-run Phillips curve left.
• D)only the short-run Phillips curve right.

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Definitions:

Tax-deferred

An investment in which taxes on the principal and/or earnings are delayed until the funds are withdrawn, commonly seen in retirement accounts like 401(k)s and IRAs.

Accumulation Period

The time frame in which an investment, such as a annuity, accumulates interest or income before disbursement or annuitization.

Distribution Period

The time frame over which payments are made from an investment, retirement plan, or insurance policy to the beneficiary.

Traditional IRA

A type of retirement account allowing individuals to direct pre-tax income toward investments, with taxes deferred until withdrawal.