Which of the following claims is consistent with the views of mainstream economists?
A)If we increase the rate of inflation from 4 percent to 6 percent, then the rate of unemployment will temporarily fall.
B)If we increase the rate of inflation from 4 percent to 6 percent, then the rate of unemployment will temporarily rise.
C)If we increase the rate of inflation from 4 percent to 6 percent, then the rate of unemployment will permanently fall.
D)If we increase the rate of inflation from 4 percent to 6 percent, then the rate of unemployment will permanently rise.

Question

Quizplus · Accepted Answer

The Phillips Curve, a concept accepted by mainstream economists, suggests that there is a short-term trade-off between inflation and unemployment. Therefore, increasing inflation might temporarily lower unemployment.

Which of the Following Claims Is Consistent with the Views