The diagram is the basis for explaining
A) the traditional Phillips Curve.
B) the long-run Phillips Curve.
C) how central planning can make full employment and price level stability compatible goals.
D) new policies for eliminating unemployment.

Question

The diagram is the basis for explaining
A) the traditional Phillips Curve. 
B) the long-run Phillips Curve. 
C) how central planning can make full employment and price level stability compatible goals. 
D) new policies for eliminating unemployment.

Quizplus · Accepted Answer

The diagram is a representation of the long-run Phillips Curve, which shows that in the long run there is no trade-off between unemployment and inflation. This means that policymakers cannot permanently lower unemployment rates by accepting higher inflation rates.

The Diagram Is the Basis for Explaining