If the AS Curve Shifts from Year to Year, but the AD

question 70

Essay

If the AS curve shifts from year to year, but the AD curve does not, then what kind of relationship would we expect between inflation and unemployment?

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Definitions:

Decision

The process of making choices among alternative courses of action.

Sunk Costs

Costs that have already been incurred and cannot be recovered, and thus should not affect future business decisions.

Future Costs

Costs that will be incurred in the future, impacting decisions on investments, production, and other business activities.

Relevant

Relates to or directly impacts the subject under discussion.