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The Lack of a Long-Run Tradeoff Between the Unemployment Rate

Question 3

Multiple Choice

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


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

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