One reason that the Phillips curve "broke down" is that it
A) is unable to explain short-run movements in inflation and unemployment, but does a better job of explaining long-run movements.
B) assumes a quick-acting self-correcting mechanism, and the economy has a very slow self-correcting mechanism.
C) is a statistical relationship, and some of the points are not sustainable in the long run.
D) cannot explain demand-side inflation, and it collapsed when demand-side inflation was predominant in the 1970s.
Correct Answer:
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Q121: Figure 33-7 Q122: All points on the long-run Phillips curve Q123: In the face of the 2007-2009 recession, Q124: In what way do policymakers have to Q125: The main process by which a recessionary Q127: The main reason why the economy's aggregate Q128: One way in which the Phillips curve Q129: The economy's self-correcting mechanism always tends to Q130: Most economists now agree that the Phillips Q131: If an economy's resources are fully employed,
A)a
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