The Phillips curve shows that the government
A. can only use expansionary policy to reduce the level of unemployment if it is prepared to accept a higher rate of inflation.
B. cannot use monetary policy to reduce the level of unemployment without causing a rise in interest rates.
C. in the long run expansionary fiscal and monetary policy can only lead to higher inflation and higher unemployment.
D. can only use fiscal policy to reduce the rate of unemployment in the short run but not in the long run.
Answer:A
The Phillips curve shows that the government
A. can only use expansionary policy to reduce the level of unemployment if it is prepared to accept a higher rate of inflation. B. cannot use monetary policy to reduce the level of unemployment without causing a rise in interest rates. C. in the long run expansionary fiscal and monetary policy can only lead to higher inflation and higher unemployment. D. can only use fiscal policy to reduce the rate of unemployment in the short run but not in the long run.