If the Economy Is at the Point Where the Short-Run

question 125

Multiple Choice

If the economy is at the point where the short-run Phillips curve intersects the long-run Phillips curve, what are the values of unemployment and inflation?

• A)Unemployment equals the natural rate, and expected inflation equals actual inflation.
• B)Unemployment is above the natural rate, and expected inflation equals actual inflation.
• C)Unemployment equals the natural rate, and expected inflation is greater than actual inflation.
• D)Unemployment is below the natural rate, and inflation is lower than the expected rate.

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