The Fact That the Phillips Curve Broke Down During the 1970s

question 35

True/False

The fact that the Phillips curve broke down during the 1970s means that aggregate demand has no effect on inflation.

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Definitions:

Free Entry

is a market condition where any business can enter the industry without facing significant barriers, promoting competition.

Equilibrium Price

The price at which the quantity of goods supplied equals the quantity demanded.

Tennis Balls

Small, usually yellow, hollow rubber balls covered in a fibrous felt, used in the game of tennis.

Tennis Racquets

Sporting equipment consisting of a handled frame with an open hoop across which a network of strings is stretched, used to hit a tennis ball.