A major flaw in the development of the simple Phillips curve is that it fails to account for the fact that:
A) the unemployment rate can change.
B) the price level can change.
C) expectations can change.
D) policies can change.

Question

Quizplus · Accepted Answer

The simple Phillips curve fails to account for the fact that expectations can change, which can influence inflation and unemployment rates independently of the relationship the curve describes.

A Major Flaw in the Development of the Simple Phillips