According to Modern Phillips Curve Theory, an increase in the sensitivity of inflation to changes in real GDP results in: (a) lower Durbin-Watson statistics across econometric estimations; (b) a movement to the left of the long-run aggregate supply curve;

According to Modern Phillips Curve Theory, an increase in the sensitivity of inflation to changes in real GDP results in: (a) lower Durbin-Watson statistics across econometric estimations; (b) a movement to the left of the long-run aggregate supply curve;

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

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Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

According to Modern Phillips Curve Theory, an
increase in the sensitivity of inflation to changes in
real GDP results in:
(a) lower Durbin-Watson statistics across
econometric estimations;
(b) a movement to the left of the long-run
aggregate supply curve;
(c) decreased employment volatility over several
economic cycles;
(d) more inflation

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