Policy Makers Should Be Aware That They

Multiple Choice

Policy makers should be aware that they

A) can never lower the unemployment rate without causing a rapid increase in the rate of inflation
B) can reduce unemployment without causing inflation if they start off slowly but intensify their efforts as the economy approaches full employment
C) may be able to stimulate the economy out of a deep recession without significantly accelerating inflation
D) must always deal with the large long-run tradeoff between inflation and unemployment
E) can announce a policy change, which will create more rational expectations and enable them to reduce inflation without any costs to society