Multiple Choice
Assume the analysis of Friedman and Phelps is correct, so that the following equation is valid: Unemployment rate = Natural rate of unemployment - a * ctual inflation - x) .In this equation,
A) a is a parameter that measures how much actual inflation responds to expected inflation.
B) a = 0 at the point of intersection of the short-run and long-run Phillips curves.
C) x is the expected rate of inflation.
D) All of the above are correct.
Correct Answer:
Verified
Correct Answer:
Verified
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