The Modern View of the Phillips Curve Suggests That

question 12

Multiple Choice

The modern view of the Phillips curve suggests that

• A) when inflation is less than anticipated, unemployment will rise above the natural rate.
• B) monetary policy will be unable to affect inflation.
• C) when people accurately anticipate inflation, expansionary monetary policy will reduce unemployment.
• D) when inflation exceeds what was anticipated, the natural rate of unemployment will rise.

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