Based on the reasoning of the original version of the Phillips curve, conventional wisdom of the 1960s was that:
A) money is not neutral.
B) there is a strong positive relationship between unemployment and inflation.
C) there is no relationship between economic growth and the savings rate.
D) there is a permanent trade-off between inflation and economic performance.
E) the real interest rate is always equal to 2 percent.

Question

Quizplus · Accepted Answer

The original Phillips curve suggested a trade-off between inflation and unemployment (which is closely related to economic performance), implying that lower unemployment could be achieved at the cost of higher inflation, and vice versa.

Based on the Reasoning of the Original Version of the Phillips