US Data Fit the Pattern of a Short Run Phillips

question 6

Multiple Choice

US data fit the pattern of a short run Phillips Curve better in the 1960s than in the 1970s primarily because

• A) government used more demand management in the 1970s than in the 1960s
• B) wages were more flexible in the 1960s than in the 1970s
• C) oil price shocks in the 1970s shifted the Phillips Curve
• D) the concepts of inflationary expectations and the natural rate of unemployment had not been introduced in the 1960s
• E) the end of the Vietnam War in the 1970s fundamentally altered the natural rate of unemployment

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