The Price Level in the Economy Between 2014 and 2015

question 242

Multiple Choice

The price level in the economy between 2014 and 2015 rose from 100 to 110.Between 2015 and 2016,the price level rose from 110 to 121.How does the short-run Phillips curve predict the unemployment rate will change as a result?

• A)The unemployment rate will decrease since inflation decreased.
• B)The unemployment rate will decrease since inflation increased.
• C)The unemployment rate will increase since inflation increased.
• D)The unemployment rate will not change since there is no change in the rate of inflation.

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Definitions:

General Journal

A bookkeeping ledger that records each financial transaction of a company in chronological order.

Net Income

The total earnings of a company after subtracting all expenses and taxes from total revenue; often referred to as the bottom line.

Revenue and Expense Account Balances

The amounts recorded in accounts tracking the income earned and expenses incurred by a business over a period of time.