Given an expectations-augmented Phillips curve and a policy designed to maintain GDP above its potential indefinitely, what sort of expectations model is required to keep inflation from accelerating year after year?
A) The persistent expectation that inflation will continue to be zero
B) Expectations based on the inflationary experience of the past 20 years
C) Expectations based on the inflationary experience of only the very recent past
D) Expectations based on completely accurate information
E) No expectations model produces stable prices with actual GDP consistently higher than its potential.

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The Answer of Given an expectations-augmented Phillips curve and a policy designed to maintain GDP above its potential indefinitely, what sort of expectations model is required to keep inflation from accelerating year after year?
A) The persistent expectation that inflation will continue to be zero
B) Expectations based on the inflationary experience of the past 20 years
C) Expectations based on the inflationary experience of only the very recent past
D) Expectations based on completely accurate information
E) No expectations model produces stable prices with actual GDP consistently higher than its potential.

Given an Expectations-Augmented Phillips Curve and a Policy Designed to Maintain