The Traditional Short-Run Phillips Curve Implies That

question 71

Multiple Choice

The traditional short-run Phillips curve implies that

• A) a central bank has no impact on the unemployment rate.
• B) a central bank has no impact on inflation.
• C) a central bank can choose higher or lower unemployment rates simply by adjusting the rate of inflation in an economy.
• D) prices are completely flexible.
• E) unemployment and inflation are unrelated.

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Definitions:

Incentive

A motivation or reward intended to encourage certain actions or behaviors.

Outcome

The result or consequence of a particular action, decision, or event in a given scenario.

Repeated Games

A strategic situation where individuals or firms face the same opponents in a series of interactions, allowing for the development of strategies over time.

Simultaneous

Occurring, operating, or done at the same time.