Assume the Analysis of Friedman and Phelps Is Correct,so That

question 40

Multiple Choice

Assume the analysis of Friedman and Phelps is correct,so that the following equation is valid:
Unemployment rate = Natural rate of unemployment - a × (Αctual inflation - x) .
In this equation,

• A)a is a parameter that measures how much actual inflation responds to expected inflation.
• B)a = 0 at the point of intersection of the short-run and long-run Phillips curves.
• C)x is the expected rate of inflation.
• D)All of the above are correct.

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