The Theory Behind the Long-Run Phillips Curve Relationship Is That

Multiple Choice

The theory behind the long-run Phillips curve relationship is that

A) people's expectations of future inflation are based on their most recent experiences.
B) people form expectations on the basis of all available information.
C) monetary policy has real effects in the long run.
D) inflation stimulates the economy,and this outcome reduces the unemployment rate.
E) prices are flexible in the long run,causing no relationship between unemployment and inflation.