In the United States, the Phillips curve is not stable in that
A) the intercept of the Phillips curve changes over time, but the slope does not change.
B) the intercept and slope of the observed Phillips curve change over time.
C) the slope of the Phillips curve changes, but its intercept does not change.
D) it changes from a curve to a circle.
Question 2
Which of the following is true in regards to Okun's law?
A) employment does not increase commensurately with output rises because firms tend to hoard labor
B) when demand increases, firms tend to work their employees harder and longer
C) it is Okun's prediction of the negative relationship between the output and unemployment gaps that allows the modern Phillips curve to be translated into the AS curve
D) all of the above
E) none of the above
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