If Employees and Employers Always Accurately Predict Inflation, What Is

question 28

Multiple Choice

If employees and employers always accurately predict inflation, what is the shape of the Phillips curve?

• A)The Phillips curve is horizontal in the short and long run.
• B)The Phillips curve is vertical in the short and long run.
• C)The Phillips curve is vertical in the short run and upward sloping in the long run.
• D)The Phillips curve is downward sloping in the short run and vertical in the long run.