Critics of the Phillips Curve Argue That in the Long

question 260

Multiple Choice

Critics of the Phillips curve argue that in the long run

• A) there is a trade-off between unemployment and inflation.
• B) for any given unemployment level there is a corresponding inflation rate to which the economy will automatically revert.
• C) employees are not able to anticipate future rates of inflation, and therefore unemployment can always be reduced by inflating the economy.
• D) there is no trade-off between inflation and unemployment because workers' expectations adjust to any systematic attempts to reduce unemployment below the natural rate.