The Modern View of the Phillips Curve Indicates That in the Long

question 72

Multiple Choice

The modern view of the Phillips curve indicates that in the long run there

• A) is no trade-off between inflation and unemployment.
• B) is a definite trade-off between unemployment and inflation.
• C) will be a trade-off if the rational expectations hypothesis is correct.
• D) may be a long-run trade-off between unemployment and inflation, but there is no such trade-off in the short run.

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