The Phillips Curve Suggests That, If Government Uses an Expansionary

question 45

Multiple Choice

The Phillips Curve suggests that, if government uses an expansionary fiscal policy to stimulate output and employment:

• A)unemployment may actually increase because of the crowding-out effect.
• B)tax revenues may increase even though tax rates have been reduced.
• C)inflation may result.
• D)the natural rate of unemployment may fall.

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Definitions:

Inequality

A mathematical statement that compares two values, showing that one is greater than, less than, or not equal to the other.

Real Number Line

The real number line is a visual representation of all real numbers in a linear arrangement where each point corresponds to a unique real number.

Inequality

A mathematical statement that indicates that two expressions are not equal, using symbols like <, >, ≤, or ≥.

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