One Implication of the Phillips Curve When It Is Unable

question 257

Multiple Choice

One implication of the Phillips curve when it is unable to shift in the short run is that

• A) fiscal and monetary policies have no impact on the economy.
• B) the economy is in a liquidity trap.
• C) policymakers face a tradeoff between low unemployment and low inflation.
• D) fiscal policy is more effective than monetary policy.

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