Figure 35-9

question 444

Multiple Choice

Figure 35-9. The left-hand graph shows a short-run aggregate-supply SRAS) curve and two aggregate-demand AD) curves. On the right-hand diagram, "Inf Rate" means "Inflation Rate."
-Refer to Figure 35-9. Faced with the shift of the Phillips curve from PC1 to PC2, policymakers will

• A) ask whether the shift is temporary or permanent.
• B) be concerned with how people adjust their expectations of inflation as a result of the shift.
• C) face, as well, a decision as to whether to accommodate the shock.
• D) All of the above are correct.

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Definitions:

Company Tax Rate

The rate at which a company’s taxable income is taxed by the government, which varies by country and sometimes also by the type and size of the company.

Inventories

Goods owned with the intention to sell them through standard business activities, in the stage of being made for sale, or as parts or materials meant for consumption in production activities or while offering services.

Consolidation Worksheet

A tool used in the preparation of consolidated financial statements to combine the financial information of a parent company with its subsidiaries.

Subsidiary Entity

An entity that is controlled by another entity, the control often being evidenced through ownership of more than half of the voting rights or through other means of control.