If Wages and Prices Adjust Slowly,we Would Expect Expansionary Monetary

question 186

Multiple Choice

If wages and prices adjust slowly,we would expect expansionary monetary policy to be

• A)less likely to reduce the natural unemployment rate.
• B)more likely to reduce inflation.
• C)more likely to affect the unemployment rate.
• D)more likely to result in a vertical short-run Phillips curve.

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Definitions:

Equity Method

An accounting technique used by companies to record their investments in other companies, where the investment gives the investor significant influence over the investee, but not control or full ownership.

Additional Paid-in Capital

The excess amount over the par value that shareholders pay when shares are issued, recorded in the equity section of the balance sheet.