Which of the Following Statements Would Be True If the Short-Run

question 133

Multiple Choice

Which of the following statements would be true if the short-run Phillips curve relationship held in the long run?

• A) A central bank has no control over unemployment.
• B) Only monetary policy,not fiscal policy,has any real effects on the economy.
• C) Prices fully adjust in the long run.
• D) A central bank can always steer an economy out of recession,simply through creating inflation.
• E) Expansionary monetary policy can decrease inflation at the expense of unemployment.

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