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If Employees and Employers Always Accurately Forecast Inflation, What Is

Question 142

Multiple Choice

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


A) ​It is vertical in the short run, and upward sloping in the long run.
B) ​It is downward sloping in the short run, and vertical in the long run.
C) ​It is upward sloping in the short run, and horizontal in the long run.
D) ​It is vertical in the short run and long run.

Correct Answer:

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