Each of the Following Is Something That Economists Know About

Multiple Choice

Each of the following is something that economists know about business cycles, unemployment, and inflation in the short run except

A) that aggregate demand interacts with aggregate supply - the Phillips curve - to generate the level of real GDP.
B) that the expected rate of inflation depends critically on expectations of the central bank's competence and commitment to price stability.
C) that the natural rate of unemployment can undergo substantial shifts in a much more rapid time scale than the changing composition of the labor force would suggest possible.
D) that anything that affects aggregate demand affects employment and output.