Multiple Choice
The short-run Phillips curve is downward sloping because
A) the expected inflation rate is zero in the short run.
B) the unemployment rate can be above or below the natural unemployment rate.
C) reducing the unemployment rate will reduce the inflation rate in the short run.
D) the economy always returns to full employment.
E) in the long run, the expected inflation rate equals the actual inflation rate.
Correct Answer:
Verified
Correct Answer:
Verified
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