What did Samuelson and Solow believe about the Phillips curve?
A) It implied that low unemployment was associated with low inflation.
B) It indicated that the aggregate supply and aggregate demand model was incorrect.
C) It illustrated that policymakers face a tradeoff between inflation and unemployment.
D) It demonstrated that fiscal policies were ineffective in reducing unemployment.

Question

Quizplus · Accepted Answer

Samuelson and Solow believed that the Phillips curve illustrated that policymakers face a tradeoff between inflation and unemployment. They argued that if policymakers wanted to lower unemployment, they would have to accept higher inflation, and if they wanted to lower inflation, they would have to accept higher unemployment.

What Did Samuelson and Solow Believe About the Phillips Curve