Which of the following is true about the Phillips curve? Group of answer choices The empirical relationship between unemployment and inflation in the US disappeared after the 1970s. This means that the theoretical Phillips curve does not represent the world well. For a researcher to identify the theoretical Phillips curve from empirical data, the economy must be subject to supply shocks. The empirical Phillips curve implies that a government must choose between either low unemployment and high inflation or high unemployment and low inflation. When inflation expectations adjust, the negative empirical correlation between inflation and unemployment might disappear.
Which of the following is true about the Phillips curve? Group of answer choices The empirical relationship between unemployment and inflation in the US disappeared after the 1970s. This means that the theoretical Phillips curve does not represent the world well. For a researcher to identify the theoretical Phillips curve from empirical data, the economy must be subject to supply shocks. The empirical Phillips curve implies that a government must choose between either low unemployment and high inflation or high unemployment and low inflation. When inflation expectations adjust, the negative empirical correlation between inflation and unemployment might disappear.
Chapter17: The Philips Curve And Expetactions Theory
Section: Chapter Questions
Problem 2SQ
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Question
Which of the following is true about the Phillips curve?
Group of answer choices
The empirical relationship between unemployment and inflation in the US disappeared after the 1970s. This means that the theoretical Phillips curve does not represent the world well.
For a researcher to identify the theoretical Phillips curve from empirical data, the economy must be subject to supply shocks.
The empirical Phillips curve implies that a government must choose between either low unemployment and high inflation or high unemployment and low inflation.
When inflation expectations adjust, the negative empirical correlation between inflation and unemployment might disappear.
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