The expectations-augmented Phillips curve concludes that ________.
A)unemployment will be lower in the short-run than in the long-run
B)unemployment will be lower in the long-run than in the short-run
C)there will be no unemployment gap in the long-run
D)there will be no unemployment in the long-run

Question

Quizplus · Accepted Answer

The expectations-augmented Phillips curve suggests that in the long run, expectations adjust, and the unemployment rate returns to its natural rate, eliminating any unemployment gap.

The Expectations-Augmented Phillips Curve Concludes That ________