If, in the long run, people adjust their price expectations so that all prices and incomes move proportionately to an increase in the price level, then the long-run Phillips curve
A) has a slope that is determined by how fast people adjust their price expectations.
B) is negatively sloped.
C) is vertical.
D) is positively sloped.
Correct Answer:
Verified
Q1: The original Phillips curve illustrates the
A) trade-off
Q3: An increase in aggregate demand temporarily reduces
Q4: When unemployment is below the natural rate
Q5: If people have rational expectations, an announced
Q6: One explanation that economists offer to explain
Q7: The Phillips curve is an extension of
Q8: The natural rate of unemployment is
A) the
Q9: An increase in price expectations shifts the
Q10: For centuries economists have puzzled over the
Q11: An increase in expected inflation
A) shifts the
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