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The Phillips curve assumes that inflation expectations are
a) changes in interest rates.
b) changes in unemployment.
c) changes in short-term output fluctuations.
d) changes in long-term inflation.
28 In the IS curve, consumption, government expenditure, exports, and imports are a
function of
a) expectations.
b) current output.
c) potential output.
d) the interest rate.
29 The explanation for the upward sloping supply of labor curve is that
a) the marginal product of capital is positive.
b) as the wage rises the opportunity cost of leisure rises, so people work more.
c) as the wage rises, people want to work less.
d) the marginal product of labor is diminishing.
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