A reverse Phillips Curve would consist of a
A) positive relationship between deviations from trend in real and nominal interest rates.
B) negative relationship between deviations from trend in real and nominal interest rates.
C) positive relationship between deviations from trend in the level of prices and the level of aggregate economic activity.
D) negative relationship between deviations from trend in the level of prices and the level of aggregate economic activity.
D
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A short-run open-economy model with demand shocks can analyze the effect on if output prices and factor prices are sticky.
a. inflation b. real economic activity (real GDP and unemployment) c. long-run variables d. expectations
It is profitable to hire more labor if the price level ________ and the money wage rate ________
A) rises; falls B) rises; rises by the same percentage C) falls; does not change D) falls; rises E) does not change; rises