Practice Questions
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What does the Long Run Phillips Curve suggest about the relationship between inflation and unemployment when adaptive expectations are considered?
The Long Run Phillips Curve is vertical. Other options are incorrect because Some might think there is a steady trade-off between inflation and unempl...
How do rational expectations influence the Long Run Phillips Curve in the context of fiscal policy?
Rational expectations mean people adjust their views based on new information. Other options are incorrect because Some might think there's a permanen...
How does the Long Run Phillips Curve illustrate the relationship between inflation and unemployment in the context of monetary policy?
The Long Run Phillips Curve shows that in the long run, inflation and unemployment do not have a trade-off. Other options are incorrect because Some p...
Which of the following statements best describes the relationship between the Long Run Phillips Curve and the natural rate of unemployment in the context of economic equilibrium?
The Long Run Phillips Curve is straight up and down at the natural rate of unemployment. Other options are incorrect because This answer suggests that...
In the context of the Long Run Phillips Curve, which of the following statements best describes the relationship between inflation and unemployment when expectations are taken into account?
In the long run, inflation and unemployment do not have a trade-off. Other options are incorrect because Many think that higher inflation always means...
What does the Long Run Phillips Curve illustrate about the relationship between inflation and unemployment in the long run?
In the long run, inflation and unemployment do not have a trade-off. Other options are incorrect because Some think there is a trade-off, meaning if o...
What does the Long Run Phillips Curve indicate about the relationship between inflation and unemployment in the long run?
In the long run, inflation and unemployment do not have a stable trade-off. Other options are incorrect because Some people think there is a consisten...
What does the Long Run Phillips Curve illustrate regarding unemployment and inflation in an economy?
The Long Run Phillips Curve shows that over time, there is no trade-off between inflation and unemployment. Other options are incorrect because Some p...
A government implements a policy to reduce inflation by increasing interest rates. In the context of the Long Run Phillips Curve, what is the likely outcome for unemployment in the long run?
In the long run, when inflation stabilizes, unemployment will go back to its natural rate. Other options are incorrect because Some might think that l...
Arrange the following concepts in the correct order to explain the relationship illustrated by the Long Run Phillips Curve: A) Economy reaches natural rate of unemployment, B) Inflation expectations stabilize, C) Short-run Phillips Curve shifts, D) No trade-off between inflation and unemployment exists.
First, the economy reaches the natural rate of unemployment. Other options are incorrect because This order suggests that the short-run Phillips Curve...
If an economy is operating at the natural rate of unemployment, what does the Long Run Phillips Curve suggest about inflation rates?
When an economy is at the natural rate of unemployment, inflation stays steady. Other options are incorrect because Some might think that higher unemp...
Long Run Phillips Curve : Natural Rate of Unemployment :: Short Run Phillips Curve : ?
In the short run, inflation can change a lot. Other options are incorrect because Some might think inflation stays the same in the short run; It's a c...
Which of the following scenarios best illustrates a situation where the Long Run Phillips Curve remains vertical, indicating no trade-off between inflation and unemployment?
In this scenario, the economy is at its natural rate of unemployment. Other options are incorrect because This option suggests that a temporary rise i...
In the context of the Long Run Phillips Curve, when the economy reaches its _____ rate of unemployment, there is no trade-off between inflation and unemployment, implying stable inflation levels over time.
The natural rate of unemployment is where the economy is balanced. Other options are incorrect because Cyclical unemployment happens during economic d...
If the economy experiences stable inflation rates despite fluctuations in unemployment, which underlying cause is most likely responsible according to the Long Run Phillips Curve?
The economy is at its natural rate of unemployment. Other options are incorrect because Some might think that higher demand always raises prices; It's...
What does the Long Run Phillips Curve suggest about the relationship between inflation and unemployment over time?
The Long Run Phillips Curve shows that in the long run, inflation and unemployment are not linked. Other options are incorrect because This idea sugge...
Which of the following statements accurately describe the implications of the Long Run Phillips Curve in relation to unemployment and inflation? Select all that apply.
Other options are incorrect because This statement suggests there is a stable link between inflation and unemployment at a specific rate; This option ...
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