Suppose the Phillips Curve Is Represented by Nt - Nt-

Multiple Choice

Suppose the Phillips curve is represented by nt - nt- 1 = 20 - 2ut. Given this information, which of the following is most likely to occur if the actual unemployment in any period is equal to 6%?

A) The rate of inflation will tend to increase.
B) The price level will tend to increase.
C) The price level will tend to decrease.
D) The rate of inflation will be constant.
E) The rate of inflation will tend to decrease.