From the standpoint of society,a stable Phillips curve indicates that
A) it is possible to have lower rates of inflation and unemployment simultaneously.
B) policies to increase employment also increase the price level.
C) wage increases that exceed productivity increases result in lower prices.
D) government policy makers need to make no fundamental choices between price stability and unemployment.
E) full employment can be defined as the unemployment rate at which price increases equal productivity increases.

Question

Quizplus · Accepted Answer

The Phillips curve illustrates the trade-off between inflation and unemployment, suggesting that policies aimed at increasing employment often lead to higher inflation, which is what choice B indicates.

From the Standpoint of Society,a Stable Phillips Curve Indicates That