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If Employees and Employers Always Accurately Predict Inflation, What Is

Question 28

Multiple Choice

If employees and employers always accurately predict inflation, what is the shape of the Phillips curve?


A) The Phillips curve is horizontal in the short and long run.
B) The Phillips curve is vertical in the short and long run.
C) The Phillips curve is vertical in the short run and upward sloping in the long run.
D) The Phillips curve is downward sloping in the short run and vertical in the long run.

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