One implication of the Phillips curve analysis is that:
A)unemployment rates below the natural rate are only possible in the long run.
B)unemployment rates below the natural rate lead to falling rates of inflation in the long run.
C)if inflationary expectations are accurate,the economy is on the short-run Phillips curve but not on the long-run Phillips curve.
D)unemployment rates below the natural rate may be achieved only with rising inflation rates.
E)the natural rate of unemployment is strictly a short-run phenomenon.

Question

Quizplus · Accepted Answer

The Phillips curve suggests that there is a trade-off between inflation and unemployment in the short run, implying that to achieve unemployment rates below the natural rate, an economy would typically experience rising inflation rates.

One Implication of the Phillips Curve Analysis Is That