According to the expectations-augmented Phillips curve,
A)If inflation rate is zero,unemployment rate will be zero.
B)If unanticipated inflation rate is zero,unemployment rate will be zero.
C)If unanticipated inflation rate is zero,cyclical unemployment rate will be zero
D)If unanticipated inflation rate is zero,cyclical unemployment rate will be negative.

Question

Quizplus · Accepted Answer

The expectations-augmented Phillips curve suggests that when unanticipated inflation is zero, the economy is at its natural rate of unemployment, meaning cyclical unemployment is zero.

According to the Expectations-Augmented Phillips Curve