According to the Short-Run Phillips Curve,if Unemployment Is 3

question 68

Multiple Choice

According to the short-run Phillips curve,if unemployment is 3.2% and inflation is 1.3%,an increase in the inflation rate might result in which of the following?

• A)an increase in the unemployment rate to 3.4%
• B)a decrease in the unemployment rate to 3.0%
• C)a decrease in the demand for labor in the economy
• D)a return to the original inflation rate of 1.3%

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Definitions:

Primary Market

The financial market where new securities are issued and sold for the first time, typically directly by the issuer to investors.

Secondary Market

A financial market where previously issued financial instruments such as stock, bonds, options, and futures are bought and sold.

Interest

The cost of borrowing money, often expressed as a percentage rate over a period of time, or the income earned from lending money.

Dividends

Money disbursed by a business to its members, principally originating from the enterprise's earnings.