The Short-Run Phillips Curve Is Downward Sloping Because

question 127

Multiple Choice

The short-run Phillips curve is downward sloping because

• A)reducing the unemployment rate will reduce the inflation rate in the short run.
• B)the expected inflation rate is zero in the short run.
• C)in the long run,the expected inflation rate equals the actual inflation rate.
• D)the economy always returns to full employment.
• E)the unemployment rate can be above or below the natural unemployment rate.

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