Refer to the diagram for a speciﬁc economy. The shape of this curve suggests that
A) the price level rises at a diminishing rate as the level of aggregate demand increases.
B) full employment and price stability are compatible goals only when aggregate demand is falling.
C) each successive unit of decline in the unemployment rate is accompanied by a smaller increase in the rate of inﬂation.
D) each successive unit of decline in the unemployment rate is accompanied by a larger increase in the rate of inﬂation.

Question

Refer to the diagram for a speciﬁc economy. The shape of this curve suggests that
A) the price level rises at a diminishing rate as the level of aggregate demand increases. 
B) full employment and price stability are compatible goals only when aggregate demand is falling. 
C) each successive unit of decline in the unemployment rate is accompanied by a smaller increase in the rate of inﬂation. 
D) each successive unit of decline in the unemployment rate is accompanied by a larger increase in the rate of inﬂation.

Quizplus · Accepted Answer

The Answer of  Refer to the diagram for a speciﬁc economy. The shape of this curve suggests that
A) the price level rises at a diminishing rate as the level of aggregate demand increases. 
B) full employment and price stability are compatible goals only when aggregate demand is falling. 
C) each successive unit of decline in the unemployment rate is accompanied by a smaller increase in the rate of inﬂation. 
D) each successive unit of decline in the unemployment rate is accompanied by a larger increase in the rate of inﬂation.

Refer to the Diagram for a Speciﬁc Economy