The Result That No Long-Run Trade-Off Between Output and Inflation

question 22

Multiple Choice

The result that no long-run trade-off between output and inflation exists

• A) depends critically on how inflationary expectations are formed as they enter the Phillips curve.
• B) can be supported by a Phillips curve model given almost any view of how inflationary expectations are formed.
• C) is nonsense because it is most certainly not true in the short run.
• D) cannot be true if a short-run trade-off between unemployment and inflation exists.
• E) none of the above.

---

Definitions:

Pica

A compulsive eating disorder of non-nutritive substances like dirt or paper, often seen in children and pregnant women.

Duodenum

The first part of the small intestine immediately beyond the stomach, where most of the chemical digestion takes place.

Peristalsis

Wavelike contractions that propel substances along a tubular structure such as the esophagus.

Constipation

Changes in the frequency of bowel movements that leads to the formation of hard, dry fecal material.