If Okun's Law Is U - Un = - 0

question 17

Multiple Choice

If Okun's law is U - Un = - 0.6 (Y - YP) , and the Phillips curve is π = πe - 2.5 (U - Un ) + ρ, then the short-run aggregate supply curve is ________.

• A) π = πe - 1.5 (Y - YP) + ρ
• B) π = πe + 4.2 (Y - YP) + ρ
• C) π = πe - 2.5 (Y - YP) + ρ
• D) π = πe - 2.5 (Y + YP) + ρ
• E) none of the above

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