The Stagflation Experienced in the U

question 148

Multiple Choice

The stagflation experienced in the U.S. during the late 1960s and the 1970s showed us that

• A) the Phillips curve accurately represents the trade-off between unemployment and inflation.
• B) both inflation and economic expansion could exist simultaneously.
• C) the relationship between unemployment and inflation was not as clear-cut as presented on the Phillips curve.
• D) it is possible to alleviate economic stagflation through the government discretionary fiscal policy.

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Definitions:

Average Effective Tax Rate

The average effective tax rate is the actual percentage of their income that individuals or corporations pay in taxes, after all deductions and credits, across different jurisdictions.

Financial Asset

Any asset that is cash; an equity instrument of another entity; a contractual right to receive cash or another financial asset from another entity, or to exchange financial assets or financial liabilities with another entity under conditions that are potentially favourable to the entity; or a contract that may be settled in the entity’s own equity instruments and is a non-derivative for which the entity may be obliged to receive a variable number of the entity’s own equity instruments, or a derivative that may be settled other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of the entity’s own equity instruments.

Marketplace Convention

Commonly accepted standards, norms, or practices adopted by a marketplace or industry.

Regulation

The act of controlling, guiding, or managing activities through rules or laws created by governments or regulatory bodies to achieve specific outcomes.