If the Phillips Curve Equation Is Ut - Ut- 1

question 46

Multiple Choice

If the Phillips curve equation is ut - ut- 1 = - (ut - un) , which of the following will increase the inflation rate by 8 percentage points?

• A) A 1 percentage point decrease in unemployment for 8 years.
• B) A 8 percentage point decrease in unemployment for 1 year.
• C) A 2 percentage point decrease in unemployment for 4 years.
• D) A 4 percentage point decrease in unemployment for 2 years.
• E) All of the above.

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