In the Self-Correction and the Long-Run Phillips Curve, at Point

question 74

Multiple Choice

In the self-correction and the long-run Phillips curve, at point b actual inflation (4%) is above expected inflation (0%) . Then inflation expectations will start to rise, and the Phillips curve will shift upward, moving the economy to point c. According to the natural rate hypothesis, there is _____ between inflation and unemployment, and thus the long-run Phillips curve is _____.

• A) no permanent trade off; a vertical line
• B) permanent trade off; a vertical line
• C) no permanent trade off; undetermined
• D) permanent trade off; undetermined

---

Definitions:

Reasons For Decisions

The rationale or underlying factors that lead to a particular choice or judgment being made.

Apologize

Expressing regret or asking for forgiveness for an action or statement.

Negative Message

Communication that conveys a refusal, denial, or unwelcome news to the receiver.

Sincere Apology

An expression of regret that is genuine and heartfelt, indicating true remorse for actions or words that caused harm.