As wages and prices become more flexible ________.
A)wages becomes less responsive to unemployment deviations from the natural rate
B)it becomes easier to differentiate the short-run from the long-run Phillips curve
C)inflation becomes more responsive to unemployment deviations from the natural rate
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

As wages and prices become more flexible, inflation becomes more responsive to unemployment deviations from the natural rate because the economy can adjust more quickly to changes in demand and supply conditions.

As Wages and Prices Become More Flexible ________