How Would a Decrease in the Natural Rate of Unemployment

question 204

Multiple Choice

How would a decrease in the natural rate of unemployment affect the long-run Phillips curve?

• A)It would shift the long-run Phillips curve right.
• B)It would shift the long-run Phillips curve left.
• C)There would be an upward movement along a given long-run Phillips curve.
• D)There would be a downward movement along a given long-run Philips curve.

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Definitions:

Contribution Margin

The portion of sales revenue that exceeds variable costs, contributing towards covering fixed costs and generating profit.

Variable Cost

Costs that change in proportion with the level of output or activity, such as raw materials and labor costs.

Scenario Analysis

A process of examining and evaluating possible events or scenarios that could affect the outcome of a decision or a projection.