Assume That an Economy Has the Usual Type of Phillips

Multiple Choice

Assume that an economy has the usual type of Phillips curve except that the natural rate of unemployment in an economy is given by an average of the unemployment rates in the last two years. Then, there is:

A) a long-run tradeoff between inflation and unemployment.
B) no long-run tradeoff between inflation and unemployment.
C) no short-run tradeoff between inflation and unemployment.
D) a sacrifice ratio that is large but not infinite.