aq20Mar2 - yes, correct. d. in the short run, suggests...

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20 March The Phillips Curve a. was and is an empirical observation – i.e. is what the data show: yes, it is based on the data. b. in the long run, suggests lower unemployment tends to produce more rapid inflation: no, wrong. In the long run, the economy will always tend to the natural rate of unemployment, and that is consistent with any rate of inflation. c. in the long run, is vertical – i.e. there is no trade-off in the long run:
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Unformatted text preview: yes, correct. d. in the short run, suggests lower unemployment tends to produce more rapid inflation: yes, correct. e. in the short run, is vertical i.e. there is no trade-off in the short run: no, wrong. f. is the idea of a trade-off between unemployment and inflation: yes, that is what it is....
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This note was uploaded on 05/22/2011 for the course ECO 2013 taught by Professor Denslow during the Spring '05 term at University of Florida.

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