It is a logical extension of the Phillips curve relationship between inflation and the difference between actual and potential GDP that
A) the inflation rate and the unemployment rate should be positively correlated.
B) the inflation rate and the natural rate of unemployment should be positively correlated.
C) the inflation rate and the unemployment rate should be negatively correlated.
D) the inflation rate and the natural rate of unemployment should be negatively correlated.
E) none of the above.
Correct Answer:
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