The Long-Run Phillips Curve Suggests That

question 13

Multiple Choice

The long-run Phillips curve suggests that:

• A) a fall in in?ationary expectations will lead to an increase in nominal wages.
• B) there is a trade-off between unemployment and in?ation.
• C) unemployment is constant in the long run, irrespective of the rate of in?ation.
• D) ?scal policy is an effective tool in increasing the level of employment in the long run.