According to the expectations Phillips curve, unemployment varies with
A) unanticipated inflation.
B) anticipated inflation.
C) actual inflation.
D) real inflation.

Question

Quizplus · Accepted Answer

The expectations Phillips curve suggests that unemployment varies with unanticipated inflation because individuals make decisions based on their expectations of inflation, and it is the unexpected inflation that affects employment and output levels.

According to the Expectations Phillips Curve, Unemployment Varies with