According to the accelerationist Phillips curve,________.
A)expectations adjust continually to the latest information
B)increases in inflation cause the unemployment gap to widen
C)inflation will change so long as an unemployment gap persists
D)all of the above
E)none of the above

Question

Quizplus · Accepted Answer

According to the accelerationist Phillips curve, inflation will change so long as an unemployment gap persists. This means that as unemployment decreases, inflation will increase, and as unemployment increases, inflation will decrease. The theory also implies that expectations adjust continually to the latest information, but it does not state that increases in inflation cause the unemployment gap to widen.

According to the Accelerationist Phillips Curve,________