There Is No Long-Run Tradeoff Between Inflation and Unemployment Because

question 35

Multiple Choice

There is no long-run tradeoff between inflation and unemployment because

• A)the aggregate demand curve always shifts back to its baseline position.
• B)inflation always returns to the baseline level.
• C)unemployment always returns to the natural rate.
• D)the Federal Reserve does not allow such a tradeoff.
• E)potential GDP declines as the rate of inflation increases.

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