When Adaptive Expectations Are Used to Model Inflation Expectations in the Phillips

question 39

Multiple Choice

When adaptive expectations are used to model inflation expectations in the Phillips curve, then the natural rate of unemployment is called the ______ rate of unemployment.

• A) structural
• B) cyclical
• C) short-run aggregate supply
• D) nonaccelerating inflation

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Definitions:

Policies

Principles or rules created to guide decisions and achieve rational outcomes.

Partner

A person who operates a business jointly with one or more other persons. Each partner is a co-owner of the business firm.

Shareholder

One who has an ownership interest in a corporation through the purchase of corporate shares or stock.

Managing Partner

A member of a partnership who has been designated the responsibility for managing the day-to-day operations of the business.