Author Question: The lack of a long-run tradeoff between the unemployment rate and the inflation rate means that ... (Read 19 times)

crobinson2013 · **on:** Jun 29, 2018

The lack of a long-run tradeoff between the unemployment rate and the inflation rate means that

A) the natural unemployment rate cannot change.
B) only a decrease in the inflation rate would bring a reduction in the natural unemployment rate.
C) only fiscal policy is effective to lower the natural unemployment rate.
D) only monetary policy is effective to lower the natural unemployment rate.
E) an increase in the inflation rate would not bring a reduction in the natural unemployment rate.

Question 2

The long-run Phillips curve is ________ curve, and moving along the long-run Phillips curve, an increase in the inflation rate is associated with ________ in the natural unemployment rate.

A) a downward sloping; no change
B) a vertical; no change
C) a downward sloping; a decrease
D) a horizontal; no change
E) an upward sloping; an increase