Which of the following curves shows a stable tradeoff between a nation\'s inflat

ID: 1121970 • Letter: W

Question

Which of the following curves shows a stable tradeoff between a nation's inflation and unemployment rates?

Question 1 options:

A) The short-run Phillips Curve.

B) The long-run Phillips Curve

C) The aggregate demand (AD) curve.

D) The aggregate supply (AS) curve

Many economists argue that, in the long run, the economy self-corrects and achieves full employment. This argument is known as the

Question 2 options:

A) natural rate hypothesis.

B) incomes policy approach.

C) political business cycle theory.

D) Keynesian cross model.

When people use all available information to formulate their forecasts of inflation, they are said to have

Question 3 options:

A) static expectations.

B) adaptive expectations.

C) rational expectations.

D) spiraling expectations.

1. A) Short-run Phillips Curve.

(In the long-run, there is no trade-off between unemployment and inflation)

2. A) Natural rate hypothesis.

3. C) Rational expectations.

(If workers and firms used rational expectations, they would make use of all available information, including knowledge of policies)

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