The Short-Run Phillips Curve Is Built on the Assumption That

question 18

Multiple Choice

The short-run Phillips curve is built on the assumption that

• A) prices are completely flexible.
• B) inflation expectations never adjust.
• C) the unemployment rate and inflation rate are not related.
• D) inflation expectations adjust over time.
• E) the natural rate of unemployment does not exist.

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Definitions:

Workplaces

Locations where people are employed and perform tasks related to their jobs, often including offices, factories, and stores.

Salivating

A reflexive response typically triggered by the anticipation or presence of food, involving the secretion of saliva in the mouth.

Noontime Bell

A bell traditionally rung at midday, often to signal a break or lunchtime in schools and communities.

Lunch Break

A designated period during the work or school day allocated for eating lunch and taking a rest from tasks or studies.