Which of the Following Is an Implication of the Modern

Multiple Choice

Which of the following is an implication of the modern view of the Phillips curve?

A) Higher rates of inflation always lead to lower rates of unemployment.
B) Higher rates of inflation always lead to higher rates of unemployment.
C) If actual inflation exceeds the inflation rate anticipated by decision makers, unemployment will temporarily fall below the natural rate.
D) If actual inflation exceeds the inflation rate anticipated by decision makers, unemployment will temporarily rise above the natural rate.