According to the Phillips Curve, Firms _____ Prices When Output

question 34

Multiple Choice

According to the Phillips curve, firms _____ prices when output is below the natural level of output, or equivalently, when the unemployment rate is _____ the natural rate of unemployment.

• A) raise; above
• B) raise; below
• C) lower; above
• D) lower; below

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Definitions:

\(( - 1 ) ^ { n + 4 }\)

An expression representing alternating positive and negative values for different integers n.

\(n + 1\)

Represents the next consecutive integer or element following 'n' in a sequence.

\(\frac { 20 } { n + 1 }\)

A mathematical fraction expressing the relation of the number 20 to one more than some number n.

\(- 4\)

A negative integer, four units less than zero.