Which Statement(s)is (Are)consistent with a Positive Relationship Between Inflation and the Output

question 60

Multiple Choice

Which statement(s) is (are) consistent with a positive relationship between inflation and the output gap?

• A)If output rises above its potential level,the unemployment rate falls and firms will raise wages and prices more rapidly.
• B)In the short run,the AS curve is upward sloping.
• C)Through Okun's law,the negative relationship between the output and unemployment gaps allows the modern Phillips curve to be translated into the AS curve.
• D)all of the above
• E)none of the above