The short-run Phillips curve shows only a short-run tradeoff between the unemployment rate and the inflation rate because in the long run the
A) expected inflation rate increases.
B) natural unemployment rate increases.
C) inflation rate returns to the natural inflation rate and so there is no long-run tradeoff between the inflation rate and the unemployment rate.
D) unemployment rate returns to the natural unemployment rate and so there is no long-run tradeoff between the inflation rate and the unemployment rate.
E) inflation rate returns to the natural inflation rate and the unemployment rate returns to the natural unemployment rate.
Correct Answer:
Verified
Q38: Moving along the short-run Phillips curve, as
Q39: The natural rate hypothesis concludes that when
Q40: The expected inflation rate is the inflation
Q41: The short-run Phillips curve is downward sloping
Q42: When the aggregate demand curve shifts rightward,
Q44: The long-run Phillips curve shows the relationship
Q45: The expected inflation rate is the
A)same as
Q46: The lack of a long-run tradeoff between
Q47: According to the natural rate hypothesis, in
Q48: Suppose an economy experiences a permanent increase
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