Which of the following statements is true ?
A)The Phillips curve has always been stable.
B)If the Phillips curve shifts outward to the right this illustrates a greater tradeoff between unemployment and inflation.
C)Keynesian economics assumes a vertical Phillips curve.
D)According to the natural rate hypothesis the Phillips curve is downward sloping.
E)All of these.

Question

Quizplus · Accepted Answer

An outward shift of the Phillips curve indicates a higher tradeoff between unemployment and inflation, meaning higher inflation is needed to achieve the same reduction in unemployment.

Which of the Following Statements Is True