Figure 33-6

-Figure 33-6 (b) illustrates that

Question

Figure 33-6
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-Figure 33-6 (b) illustrates that

Quizplus · Accepted Answer

Figure 33-6 (b) illustrates that in the short run, it is possible to "ride the Phillips curve" down toward lower rates of inflation, and up toward lower unemployment by stimulating aggregate demand. However, the Phillips curve connecting points g, e, and r is not a menu of policy choices as it does not represent a stable long-run relationship between inflation and unemployment. Therefore, all of the given options are correct.

Figure 33-6 ​

Figure 33-6