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-Refer to Figure 13

Question 50

Multiple Choice

  -Refer to Figure 13.5. If the economy's institutions and wage bargaining practices change to make wage rate increases more sensitive to output gaps and unemployment rates, the Phillips curve: A)  would be vertical like V. B)  would be horizontal and therefore flatter than W. C)  would change its slope as illustrated by a movement from curve X to curve W. D)  would change its slope as illustrated by a movement from curve W to curve X.
-Refer to Figure 13.5. If the economy's institutions and wage bargaining practices change to make wage rate increases more sensitive to output gaps and unemployment rates, the Phillips curve:


A) would be vertical like V.
B) would be horizontal and therefore flatter than W.
C) would change its slope as illustrated by a movement from curve X to curve W.
D) would change its slope as illustrated by a movement from curve W to curve X.

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